In his return to The Sherman Show, Peter Cecchini, global chief market strategist at Cantor Fitzgerald, discusses the unfolding intersection of the end of the secular decline in interest rates and the next recession. Mr. Cecchini, DoubleLine Deputy Chief Investment Officer Jeffrey Sherman and portfolio manager Sam Lau also delve into the dilemma confronting the Federal Reserve and the European Central Bank: the difficulty of raising rates and reducing balance sheets before economic slowing turns into economic contraction. (Cecchini was one of the few last year to predict the Fed would put its rate-hiking plans on hold.) Cecchini regards the recent surge in stocks as a bear market rally. He expects the dollar and interest rates to “push and pull against each other,” resulting in both staying range-bound in 2019. The Sherman Show discussion also popularizes an insider’s term for an especially violent episode of market volatility: the notorious “face-ripper-offer.”
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