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What began as the smallest of dovish comments among a broad range of hawkish “Fedspeak” from Chairman Powell in his post-FOMC press conference earlier this month, became a rallying cry for many market participants wanting to celebrate their belief that Fed is positioning itself to REFILL the proverbial monetary "punch bowl“… 
 
 ...and...that the risk-on PARTY has started again, after eighteen months of inflation-induced sobriety. 
 
Already the forward short-term interest rate contracts in the EU, UK, and US, are "pricing-in" CUTS in Policy Rates next year. In the US there is now a chance, small as it may be, that the Fed will cut rates in March. Naturally, this is ludicrous. In fact, the Fed might view the market's thirst for the punch bowl to be refilled as RISK to their fight to tame inflation. The market itself could be the risk point that keeps the Fed tighter, longer, at least until the economy cracks wide open, the odds of which are rising dramatically given the recent macro-data deluge (CPI, Retail Sales, NY Fed). 
 
Plowing back into US equities may not be the optimum play here. The Fed IS likely done hiking, but the focus around the world is NOT on the Fed, as MANY global Central Banks are already cutting rates and easing monetary policy, many of them in Emerging Markets. In terms of investment there are several favorable markets, all are commodity and natural resource producer/exporters who have a trade relationship with China and a currency that has stabilized, and/or broken out to the upside versus the USD. 
 
So rather than be passive and indexed to the US stock market. I would rather focus on non-USD currencies, specific global Bond markets, Emerging market stock indexes, Commodities...and...the Real Estate sector! 

Indeed, I ask, could Real Estate be THE hottest "sector" in 2024? The answer could very well be a resounding YES! 
 
Listen to Episode One of Season Two to learn why I say all this, with the knowledge that ALL of the above alternatives to the US stock market are outperforming the US S+P 500 Index right now, and all of them stand to benefit if the Fed does in fact lighten the pressure on the monetary brakes, “Fedspeak” wise.

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