>>21357977Inflation.
We have literally explained it to you over 20 times.
The major catalyst for inflation remaining sticky / moving higher will be oil (and other commodities) and housing
The reasons why oil / commodities will move higher are many
>1) Central banks worldwide cutting, easing financial conditions>2) Short commodities, in particular short oil, is an *extremely* crowded trade (google it)https://www.bloomberg.com/news/articles/2024-09-13/hedge-funds-have-never-been-this-bearish-on-brent-crude-beforehttps://archive.is/ApAzX>3) China stimulus - China consumes 15% global oil, China = copper/iron/coal/natural gas demand>4) Middle East conflict^ Central banks will blame inflation remaining sticky on #4, when really it's just #1 (their own failed monetary policies)
Housing will remain elevated, as when interest rates lower, housing demand increases
Furthermore, landlords who own property, each day that passes they raise their rent costs
Both mortgages / rents will remain sticky, and are the major component for inflation stats
tldr; Oil + Housing will result in inflation moving higher / remaining much stickier than thought
This will coincide with the labor market weakening - stagflation
This will cause the market to crash - the bond market has already sniffed this out
https://www.reuters.com/markets/rates-bonds/feds-bumper-rate-cut-revives-reflation-specter-us-bond-market-2024-09-25/>The Federal Reserve's aggressive start of the easing cycle has rekindled inflation worries in the U.S. bond market, as some investors fear looser financial conditions could re-ignite price pressures.>Yields on longer-dated Treasuries that are most sensitive to the inflation outlook have risen to the highest since early September, with some investors worried that the Fed's shift in focus from beating back inflation to protecting the job market could allow for a rebound in price pressures.This is the reason why bond yields are moving higher upon the Fed cutting 50bps
