Analyzing the Fed’s Data Dependency, Effect on Economic Health and What it Means for Traders with Bluford Putnam

By NinjaTrader

At the recent Federal Open Market Committee (FOMC) press conference, Chairman Powell stated emphatically that, “Rate cuts this year are not in our baseline expectation.” However, there is an unusual disconnect between Fed guidance on rates and the federal funds futures market. This divergence may present unique event risk as traders grapple with possible Fed vs. Market scenarios and its effect on economic health. 


Futures Trading Tactics Based on Market Movements 

In this edition of the See the Futures show we analyze futures trading tactics based on market movements. Our guest Blu Putnam, the CME Group’s Chief Economist, provides insights into the Fed Funds relationship to the inflation story. Special attention was given to key arguments surrounding a potential recession (or no recession) related to future Fed action.

Additional topics covered in the livestream include:  
  • An analogy on the side effects of curing the economy’s health scares since 2020 
  • A discussion on how recent turbulence in the oil market could affect inflation expectations 
  • An outlook on employment data’s importance to the Fed’s decision making in the latter part of 2023 
  • An opinion on an alternative to the 2-yr- 10-yr yield spread as a recession indicator 
  • An explanation of why the banking sector should be closely watched in the next earnings cycle as it relates to economic health 
  • Charting analysis of S&P Regional Bank Index, New Unemployment Insurance Claims, CPI, WTI Crude Oil Futures 

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