Strategy Note /
Global

Jackson Hole's Real Message

  • Jackson Hole's real message is the start of the validation of the high nominal growth world we have highlighted

  • US inflation shld fall faster than expected; at EU energy fear peak; China has drawn a line under its property sector

  • Sept will mark end of Fed hike front loading & beginning of USD rollover with significant asset allocation implications

Jay Pelosky
Jay Pelosky

TPW Founder & Global Strategist

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TPW Advisory
2 September 2022
Published byTPW Advisory

Jackson Hole’s real message was not just one of more pain but rather the beginning of the validation of the high nominal growth world we have highlighted for some time.

 

While post JH cross asset action has been akin to a “technical torture chamber” we remain constructive across our Tri Polar World’s 3 key questions for the 2nd H: the pace of US inflation’s fall; the path of European energy prices & the smoothness of China’s exit from lockdown.

 

US inflation is likely to fall faster than most expect; we are at peak fear in terms of European energy and China has drawn a line under its property woes leading to the best month in over a decade for China HY bonds (yes you read that correctly).

 

We are focused on the end of the Fed’s front loading exercise and the rollover of the USD which will set the stage for significant asset allocation opportunities.