Editor's Note: Below is an excerpt from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more.
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Don’t forget that our predictive tracking algos have us in Quad 2 for Q2. What is Quad 2? A: When both year-over-year growth and inflation are accelerating at the same time. The problem with Quad 2 is that the Fed tends to get hawkish (late cycle) on a lag to late cycle economic data. Never forget that inflation (especially wage inflation) is a late cycle economic indicator... ...As you can see in today’s Chart of The Day, our predictive algo not only has inflation re-accelerating to the cycle peak in Q2 but rolling over again in Q4. Maybe that’s what the bond market is looking at. God forbid our forecasts continue to be right! |
