Bondurri: Fed Going Higher for Longer

The transcript discusses the 'higher for longer' trajectory of interest rates, emphasizing the need for 10-year government bond rates to reach 4% to reflect this. It highlights the market's expectation of an early Fed pivot, which is unlikely. The impact of Fed policy on equity markets is explored, noting that a lack of rate cuts could halt market rallies. The potential for a hawkish Fed stance is considered, with implications for equity valuations. The market's reaction to the RBNZ's unexpected decision is analyzed, focusing on currency and bond markets. Finally, factors contributing to potential dollar depreciation are discussed, including strong dollar appreciation, Fed policy, and geopolitical stabilization.

How might the upcoming Fed Minutes influence market expectations regarding interest rates?

What does a hawkish stance from the Federal Reserve imply for future interest rate decisions?

What is the significance of the yield gap between the dollar and other currencies in the current economic context?