Happy Sunday from wet Copenhagen! It is always lovely to get back on the road and meet a load of fund managers, and it is nice to see that a few reflation skepticals are still found out there.

I went to London to meet with a bunch of the big funds in town, hot on the heels of Powell’s reflationary Fed meeting on Wednesday. It almost annoyed me how “vanilla” my analysis had to be on the back of it, as the Fed is moving the needle lower and lower and lower on the implied Real Fed Funds rate every meeting currently, no matter the underlying developments in inflation and/or growth.

It is admittedly VERY hard to bet against such a lean from the FOMC, but it also feels increasingly like there is a lack of an edge in just stating the obvious surrounding that. We have been timing this reflation/inflation comeback in the US tremendously well, and while I was seen as a mad-man when I traveled London with a comeback inflation message in December 2023, I was now rather seen as someone with a slightly more flamboyant version of the deck they had seen from 2-3 other guys through last week.

Being “middle of the road” always makes me think. Is there any edge left in this narrative? Is the narrative about to shift? And how close are we to an exhausted trade. The Head Fake reflation it is ..

Meme of the week: Brrrrrr-man Powell is back!