The Big Flip?

“And it is our judgment that we're not yet at a sufficiently restrictive policy stance, which is why we say that we expect ongoing hikes will be appropriate.”-Jerome Powell.

PS: Before I start, I want to announce a new feature to my substack: the footnotes. A lot of people are fresh to the macro world; thus, to make things uncomplicated for them, I have introduced this. I hope you will find the new feature valuable.

A mind-blowing Non-Farm Payrolls Number¹(NFP), a significant easing of financial conditions thanks to tighter credit spreads and an unbelievable rally in stocks, a slight recovery in housing and auto sales and a bump in Services PMI²: The data releases in the past fortnight point out that there is a “big flip” in the macro arena in the US.

The GDP estimates by the Atlanta Fed GDPNow tracker further solidifies the fact:

Starting at just 0.7%, estimates for Q1 real GDP have moved significantly upwards to 2.5%.

Time for introspection?

So, after the latest data releases and especial…