Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! Have We Hit The Bottom? Right now I believe two things to be true: 1) We’ve overshot the “bottom” in cloud software. 2) That doesn’t mean we won’t still go lower, and lower before higher appears to be the most likely path forward. Here’s how I get to this:
Hi Dan. The Eurodollar curve for Dec 22 is implying that the Fed will get to a rate of roughly 1.8% through the December meeting. The Eurodollar curve is also pricing in cuts as soon as Summer '23. With deteriorating economic conditions to present themselves through this Summer and with negative Q1 GDP growth and likely Q2 GDP growth, Powell will likely atleast pause rate hikes.
You write: "Powel has guided to 2-3% rates by end of year. But the market just doesn’t believe that." In your mind what does the market believe?
Hi Dan. The Eurodollar curve for Dec 22 is implying that the Fed will get to a rate of roughly 1.8% through the December meeting. The Eurodollar curve is also pricing in cuts as soon as Summer '23. With deteriorating economic conditions to present themselves through this Summer and with negative Q1 GDP growth and likely Q2 GDP growth, Powell will likely atleast pause rate hikes.