Krueger, like others, added that the Fed would most likely be the clinch factor in determining the remaining downside for risk assets.“Can scalps levels, but seriously doubt any level will bring a trend change by itself. Slight chance the Fed does not turn hawkish on Wed and if so rally hard. Hawkish acceleration more likely.”
“At some point financial conditions will tighten enough and/or growth will weaken enough such that the Fed can pause from hiking,” Goldman Sachs strategists including Zach Pandl wrote in a note“But we still seem far from that point, which suggests upside risks to bond yields, ongoing pressure on risky assets, and likely broad US dollar strength for now.”
That trend looks set to continue as macro conditions pressure practically every other world currency and risk assets to provide no realistic safe haven.