Digesting the Fed decision
• Mixed signals. The divergence across markets continues. US equities are holding up, while bonds continues to price in a recession.• Fed cycles. Bond markets have factored in the next Fed easing cycle. But compared to history and given the US’ inflation problem this looks to aggressive.• AUD crosses. AUD/USD remains range bound. But we expect the slowdown in global/domestic growth to see the AUD continue to underperform on the crosses. Markets continue to digest yesterday’s US Fed announcement. The ongoing divergence across asset classes continues to highlight the more challenging economic environment we are in, with uncertainty about how...