Access the Powerpoint slides of this month’s ET Pro monitors here.
Access the PDF version of the ET Pro monitor slides here.
Access the underlying Excel data here.
- Central bank policy narratives have become highly diluted relative to prior periods, we think in large part as a result of the emergence of a wide variety of additional macro questions attracting moderate levels of competing attention.
- When missionaries write about central banks, they are writing stories which do not have much connection to discussions of risky asset markets in general, and writing stories about a huge range of topics, from divergence in stock/bond market returns, to emerging markets turmoil, to tariff-induced inflation, etc.
- We do continue to see a strong linkage between the Trade War and “necessary” policy response (see SW quadrant).
- We still think there is a long-cycle narrative of Central Bank Omnipotence – that the Fed will step in if needed on rates, and that doing so will be effective w/r/t asset prices – but there is no question that it is muddled in the short run.
- Given this narrative structure, we would generally expect greater than expected response to either positive or negative surprise on interest rate policy or associated language.
Narrative Sentiment Map
Narrative Attention Map
Fiat News Index
Powell: Economy Seen in Sustained Expansion [NY Times]