Has the Fed Already Gone Too Far?

Real Vision: Finance & Investing

Real Vision

Investing, Business News, News, Business

4.1 • 1.1K Ratings

🗓️ 12 July 2022

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

Markets meandered during a mixed Monday session, as investors bide their time ahead of Wednesday’s release of consumer price index data for June. We’re already seeing signs that tighter money is impacting real economic activity in the U.S., with homebuilders reporting steep slowdowns in sales and sharp upticks in cancellations last month. Tighter policy is also encouraging investors seeking safety, putting upward pressure on the U.S. dollar, through knock-on effects, draining even more liquidity from global markets. In his most recent note, Michael Howell reported that CrossBorder Capital’s Global Liquidity Index “is still testing a low reading of 29.5” within a range of 0 to 100. “Liquidity matters,” says Howell, CrossBorder Capital’s founder. He believes central banks are making another major error, this hammering too hard on the brake. “The world economy is now in a recession.” Howell, managing director at CrossBorder Capital, joins Real Vision's Maggie Lake to discuss the developing “big liquidity squeeze” and the “world recession” he says is its cost. We also hear from Raoul Pal about the increasingly complex macro environment. Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3yUwdjU. Watch Friday’s full Daily Briefing episode featuring Raoul Pal and Maggie Lake here: https://rvtv.io/3nVsvAs. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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1:08.2	Hello and welcome to the real vision daily briefing. It's Monday, July 11th, 2022.
1:12.8	I'm Maggie Lake and here with me today is Michael Howell, the CEO of Cross Border Capital. Hi,
1:18.0	Michael. I'm Maggie. How are you doing? I'm doing okay for a Monday. Although I have to say,
1:22.6	it feels like a little bit of a sort of stressful one. Investors definitely seem on edge. We have
1:28.8	US stocks trading lower than Aztec bearing the Bryant and that selling seemed to accelerate
1:33.6	a little bit in the afternoon. We have the 10-year treasury hanging around 3% as everyone waits
1:38.8	for the big CPI inflation data, PPI that's coming later this week Wednesday's CPI and we have
1:45.9	the US dollar continuing to strengthen. As you look across the dashboard, what's really top of
1:52.4	mind for you? Dollar, I think unquestionably. Dollars going up, it's going up more. It's I think
2:00.3	is your colleague role set. It's a wrecking ball and it's likely to cause the euro to trade below
	...

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