...the problem is the US market has now all factored in at least 75-100bps cuts over Nov&Dec (no FOMC in Oct) and unprepared for a reflation scenario.
...a commodity price rise at this point could lead to an earlier stagflation scenario and puts the Fed in a deep corner on whether it should prioritise unemployment over inflation.
China's easing and stimulus measures could make the Fed's job that much harder, as we may see a renewed bid in all variety of commodities. That bid could lead to a rekindling of some inflationary pressure that comes right back to US households. Something the Fed hoped was over.
https://x.com/Mayhem4Markets/status/1838599847827419248
Its Over, page-23812
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