Aaron Kohli

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Last quote by Aaron Kohli

It's the very last, low hurdle to cross. If it's even barely good, it will be good enough.feedback
Mar 03 2017 Interest rates
We can learn a lot about a person if we know what types of things he or she talks about or comments on the most frequently. There are numerous topics with which Aaron Kohli is associated, including Fed, November, and market. Most recently, Aaron Kohli has been quoted saying: “It's the very last, low hurdle to cross. If it's even barely good, it will be good enough.” in the article The Federal Reserve has one last 'low hurdle' to jump before a rate hike.
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Aaron Kohli quotes

We do believe the market is getting a little ahead of itself. The flattening of the yield curve seems to suggest we're prepping for a hawkish Fed, but it's difficult to assume that a Fed that's been so historically cautious and has taken such a wait-and-see approach … is going to suddenly turn very aggressively hawkish when the president-elect hasn't even been sworn in yet.feedback

I think any time you violates these bounds usually you get a pullback in yield so you might retrace a bit. We've gotten here so quickly. We got from (10-year yield) 1.70 to 2.50 in very short order. It's been a big shock to the market. I think the immediate knee jerk reaction will be for shorts to take profits.feedback

In the past they would have had to go out and buy to match the benchmark. It's dropped off … in the past it made sense to do that because the prevailing direction of rates was lower.feedback

You want yields to be higher because there's expectations for growth ... but you don't want them selling off, or you don't want them up 60 basis points because somebody got squeezed. You want them up on future growth.feedback

There's a new psychology in the market. We've spent so long looking to buy rates, we've switched around.feedback

The reality is I'm not sure that tomorrow's (jobs report) can provide enough of a boost to get there. We always tend to focus on the headlines. What's more important this time around is the hourly earnings. You could be adding stimulus into a market where labor conditions have already tightened and wages are moving up.feedback

We're obviously focused on the ECB as more of an event risk.feedback

We're starting to see some momentum as rates turn toward a rally and really watching the front end and what it will price for the Fed in December. There's some technical patterns that suggest the two-year might be rallying, but right now the market is approaching a bigger decision point. Particularly as we get to November, the market will have to be setting up for a rate hike in December.feedback

We had a big jump in yield. Then we came right back to where we started.feedback

The market right now is battling with the timing and how likely it is that they get a hike off this year.feedback

Though extremely unlikely to happen, it occurs to us that the best way for the Fed to guide the markets in this case might be to simply say less and let the market adjust to incoming data rather than trying to manage hike probabilities higher through jawboning.feedback

The market is looking at different things, we've got the headline, which is a little bit softer, and the average hourly earnings that are much better.feedback

The tension is fairly evident. You've got the Fed that's trying very hard to keep some of the hikes this year on the table, and you've got a market that is pricing in just one hike. There are quite a few investors who believe the Fed may be cutting soon. That dichotomy certainly has widened quite a bit.feedback

The Fed did seem to acquiesce a little in the statement. They were certainly on the dovish side of what they could have said. But definitely the market's view on where the data are headed and the Fed's view really are diametrically opposed.feedback

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