Here’s my most recent observation on the Federal Reserve’s stance on inflation as of March 21, 2024.

• Powell surprised some market participants with a dovish stance by sticking to the expectation of three rate cuts this year.

• Furthermore, discussions of easing the balance sheet roll-off incrementally raises the risk-on implications of this meeting.

• Those who were positioned for hawkish rhetoric out of the March FOMC conference were disappointed and will have to realign themselves with the reflation trade.

• I expect further gains in equities and other risk assets through March and April. Barring major upside surprises in inflation data, the Fed should maintain their stance. Summer may spell a different story.