Embracing Challenge, Creating Change -#AnirudhSethi

Embracing challenges and creating change are important principles for personal and professional growth. When faced with challenges, it is natural to feel overwhelmed or uncertain, but taking on challenges can help us develop new skills, gain new perspectives, and expand our comfort zones. Embracing challenges allows us to grow and learn in ways that we may not have thought possible.

Creating change is equally important. Whether it’s making changes in your personal life or in your career, taking the initiative to create change can help you reach your goals and bring new opportunities. It requires courage, creativity, and determination, but the rewards can be significant.

To embrace challenges and create change, it is important to have a growth mindset and a willingness to take risks. This requires being open to new experiences, being adaptable, and having a positive attitude. It’s also helpful to have a support system of friends, family, or colleagues who can offer encouragement and guidance.

In addition, it’s important to have a clear vision of what you want to achieve and to create a plan for how you will achieve it. This can involve setting specific, measurable goals and taking action steps to reach them.

Ultimately, embracing challenges and creating change is about embracing the unknown and being willing to step outside of your comfort zone. By doing so, you can unlock your full potential and achieve greater success in life.

What Trading Teaches Us About Life ? #AnirudhSethi

  1. Patience: Successful traders understand that patience is key in making good decisions and avoiding impulsive ones.
  2. Risk management: Trading teaches us to manage risk by understanding the potential outcomes and consequences of our decisions.
  3. Adaptability: The markets are constantly changing, and successful traders must be able to adapt to new conditions.
  4. Discipline: Consistently sticking to a well thought out trading plan requires discipline, as emotions and temptations can easily lead to deviations.
  5. Independence: Traders must make decisions based on their own research and analysis, and not rely solely on others’ opinions.
  6. Knowledge: Successful traders are constantly learning and expanding their knowledge of the markets and economics.
  7. Focus: The ability to stay focused and avoid distractions is crucial for traders who must make split-second decisions.
  8. Confidence: Confidence in one’s decisions is important, but not to the point of overconfidence, which can lead to poor decision making.
  9. Perseverance: Trading, like life, can have its ups and downs. Perseverance in the face of adversity is essential for success in both.
  10. Objectivity: It’s important to have a clear and objective understanding of the market and not let emotions cloud judgement.

The full FOMC statement from the February 2023 Federal Reserve meeting

The full statement from the FOMC February 2023 interest rate decision meeting:

Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation has eased somewhat but remains elevated.

Russia’s war against Ukraine is causing tremendous human and economic hardship and is contributing to elevated global uncertainty. The Committee is highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4-1/2 to 4-3/4 percent. The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lael Brainard; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller.

Economist who invented the yield curve recession indicator says it different this time

Economist Campbell Harvey wrote his PhD dissertation at the University of Chicago decades ago on the shape of the bond yield curve being linked to the path of US economic activity.

i.e. That US recessions have been preceded by an inverted yield curve

  • hich is when short-term rates exceed those of longer term rates (this is the gist of it)

This time though…

  • “My yield-curve indicator has gone code red, and it’s 8 for 8 in forecasting recessions since 1968 — with no false alarms,”
  • “I have reasons to believe, however, that it is flashing a false signal.”

Harvey outlines his reasoning here at the article.

Harvey was speaking in an interview on Tuesday.

Harvey is a professor at Duke University’s Fuqua School of Business.

inverted yield curve

UK news – millions of low income households to receive 900GBP cost of living payment

The UK Department For Work And Pensions with the announcement that

  • millions of low-income households to get new cost of living payments from Spring 2023
  • £900 cost of living payment
  • direct to bank accounts
  • three payments over FY2023

There may be questions raised in financial markets about the impact on inflation of what is, in effect, a fiscal boost. But folks gotta eat and warm their homes.

Sunak's budget

BOJ October monetary policy meeting minutes are out, no clue to December meeting bombshell

Headlines from the release via Reuters:

  • Members agreed must maintain current easy policy to stably, sustainably hit price target
  • One member said effect of BOJ’s easing may be heightening as moderate increase in inflation expectations push down real interest rates
  • One member said rise in nominal wages crucial for inflation to stably hit 2%
  • A few members said ill-timed policy tweak could disrupt positive inflation-wage spiral
  • One member said while there is no immediate need to tweak policy, BOJ must keep eye out on side-effects of easing, examine how rising prices would affect households’ behaviour and wages
  • This member added BOJ must keep checking whether market players are prepared for when boj exits easy policy, scrutinise how a future exit could affect markets
  • A few members said BOJ must be mindful of how future interest rate rise may affect mortgage loans
  • One member said BOJ must deepen analyses on relationship between Japan’s inflation and wages
  • A few members said recent sharp yen falls heightening uncertainty for firms, have many demerits for japan’s economy
  • One member said fx rates must be determined by fundamentals

Nothing there of surprise. No hint to the move in December.

Central Banks BlackRock – central banks are causing recessions rather than coming to the rescue

  • We are in a new world shaped by supply. Major spending shifts and production constraints are driving inflation.
  • Constraints are rooted in the pandemic and have been exacerbated by the energy shock and China’s lockdowns.
  • We are in a new macro regime where central banks are causing recessions rather than coming to the rescue. That is clear in the rate path of major central banks set to overtighten policy as they battle inflation. We think they will eventually pause but not cut rates when confronted with the damage of sharp rate hikes – that could be the reality of recession or the appearance of financial cracks, as seen in the UK.
  • The Federal Reserve … signaled it would have to take rates higher than it originally planned, even if at a slower pace.
  • The Bank of England has acknowledged some recession is necessary to get inflation down, yet like other central banks, it is failing to acknowledge the scale of the recession needed to get it all the way down to target.
  • The ECB continues to normalize monetary policy, but a change in tone suggests it could be poised to slow the pace of hikes. We think the ECB is still raising rates into a recession triggered by the energy shock and its hikes.
  • Investment implication: We are tactically underweight DM equities after having further trimmed risk.

China October data – retail sales fall y/y, industrial production up

Chinese economic activity data for October 2022. Both sales and output missed expectations.

china otco data 15 November 2022

October retail sales fell y/y. They last fell back in May when Shanghai was locked down. Rolling COVID restrictions and a collapsing property market were negative influences on this data for October. Yesterday I posted on moves from Chinese authorities to address COVID and property woes and boost the economy

Other data released included:

Surveyed Jobless Rate 5.5% y/y

  • expected 5.5%, prior 5.5%

Property Investment YTD -8.8% y/y

  • expected -8.3%, prior -8.0%

Fixed Assets Ex-Rural +5.8% YTD y/y, also a miss

  • expected 5.9%, prior prev 5.9%

IMF on global economy – “the outlook is gloomier”, particularly in Europe.

The International Monetary Fund has written in a piece prepared for the summit of G20 leaders in Indonesia,

recent high-frequency indicators “confirm that the outlook is gloomier,” particularly in Europe
It said recent purchasing manager indices that gauge manufacturing and services activity signaled weakness in most Group of 20 major economies, with economic activity set to contract while inflation remained stubbornly high
IMF citing:


  • tightening monetary policy
  • triggered by persistently high and broad-based inflation
  • weak growth momentum in China
  • ongoing supply disruptions and food insecurity caused by Russia’s invasion of Ukraine

Info via Reuters.

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