Surveillance: Yield Forecast with HSBC's Major
Bloomberg Surveillance
00:00
The Risks to the Dollar Trade
The banking crisis in the US will keep lending conditions tighter, which will really cap how far the Fed can raise rates. The M&T results that we got this morning seem to suggest that it's not really a problem. Then all of a sudden, do you start to price in more Fed rate hikes and you end up with perhaps a stronger dollar than you otherwise assume? If the banking data massively improves, all of the doom and gloom goes away. And let's say it's followed by an inflation print or two that comes in heart. Inflation rebounds and therefore the Fed continues to remain hawkish. So yes, that is the biggest risk to the trade. Oil prices is the other
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