AM Brew May 4, 2022

The Fed Meeting is the Big News Today. What will markets look for:

1. 50 bps increase

2. Vote Margin

3. What is happening with the Fed Balance Sheet going forward

4. Guidance and wording

This meeting has the potential to be one of the very few memorable meetings, and thus it should dominate our thoughts for the day. It will be interesting to see how the curve steepens or flattens over the next week or two as the markets digest the implications.

For now, the 5-30 curve is doing just as one would expect before a catalyst such as this: coiled up in the middle of a range.

Contact us for one-on-one technical consulting regarding Fed policy & strategy. Our general consensus here is that yields are topping out.

Gold is weak going into the Fed meeting, suffering consecutive down weeks for the first time in 2022. Current Fed policy has been weighing on bullion, which has traded down from over $2,000 in March. Below is an idea we published last night on long gold into the 1900 area.

This is one of the most memorable FOMC meetings in the last decade. Is it a new Fed or is it the Yellen/Bernanke continuation? The upcoming announcement could provide some of the best clues, allowing investors and traders to formulate strategy for the rest of the year.

Pre-market there are significant laggards worth noting this morning:

Particularly noticeable is the action in UBER & LYFT versus AirBnB (ABNB). ABNB reported a very strong quarter and is a much superior business to Uber & Lyft, which theoretically could be extinct in 10 years. UBER's DeMark chart wasn't looking too healthy prior to the 27% drop this morning to $22:

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