In a recent note to clients, Dario Perkins, managing director of global macro at TS Lombard, highlighted the central banks’ cautious approach to policy tightening. Perkins stated that central banks are prepared to cut rates gradually, but will act swiftly if employment deteriorates. The shift in market sentiment from expecting a potential economic downturn to a more optimistic outlook has led to a rise in yields. Perkins reassured investors that this development should not be viewed as bearish for risk assets, emphasizing that the Federal Reserve has not made any missteps. Overall, the reassurance from Perkins suggests a more stable economic outlook moving forward.
The Defi FunFacts:
- Central banks closely monitor employment data to gauge the health of the economy and adjust monetary policy accordingly.
- Bonds were recently pricing in a higher likelihood that central banks would be too slow to cut rates in response to economic weakness.
- The recent uptick in yields in the bond market indicates that investors are now more confident in the central banks’ ability to react quickly to changes in economic conditions.
- Dario Perkins, a managing director at TS Lombard, believes that the current stance of central banks is not bearish for risk assets and does not indicate that they have made a misstep in their policy decisions.
- Overall, the current outlook suggests a cautious approach to rate cuts, with central banks prepared to act swiftly if needed but also willing to adjust their response based on incoming data.
I don’t own the rights to this content & no infringement intended, CREDIT: The Original Source: www.coindesk.com
