The models are broken
The market is trying to get back to the pre-Covid and pre-war times, but that model is broken. A new dawn is here and the financial world needs to adapt.
Steen Jakobsen,
Chief Investment Officer
Head of FX Strategy
Summary: Markets reacted in choppy fashion to the Fed Chair Powell speech delivered yesterday, as Powell rather under-delivered on specifics with the new flexible average inflation targeting regime, but markets were rather quick to right themselves, save for long US treasuries, where yields remained higher into this morning. In other news, the yen strengthened as Japan Prime Minister Abe announced he resign after his term ends in a year, citing health reasons.
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