The Skeleton Key Market

ZH: Goldman: We Were Wrong About The Fed

Yesterday, when we looked at Goldman's forecast for monetary policy over the next few years, one thing stood out: the bank's expectation that the median 2023 dot would show one rate hike, a hawkish prediction that spread like wildfire across markets and prompted speculation among some, such as JPM, that a shorter liftoff telegraphed by the Fed would spark a "repricing" across the entire rates complex which then obviously would also impact risk assets.

What repricing? ZH: JPM: The Entire Rates Complex Will Reprice If Fed Confirms That Lift-Off Is Coming In 2023

Today’ FOMC is expected to symbolically validate what the market holds to be self-evidently true – that when economic facts change, especially radically, so too will policy. It shouldn’t matter that the market already has the best part of three hikes priced for 2023, any acknowledgement by the Fed that lift-off is being brought forward into 2023 would effectively sanction the continued re-pricing of the entire rates complex.

Most market participants believe in the Fed, completely. If you've seen the Skeleton Key with Kate Hudson, you'll get the reference. If not, it's a decent horror flick. The market is Kate Hudson.