The global rally hinges on false BOJ pause belief; economists still anticipate rate hikes. The 2024 recession is going to be painful. Buckle up!

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This is where the bull shit hits the road. This entire week’s global rally was based on the widespread belief that the BOJ has paused permanently. However, the majority of economists in Japan expect rates to continue rising THIS year: BOJ Watchers Keep Rate Hike Views Unchanged: finance.yahoo.com/news/boj-watch “Most Bank of Japan watchers have kept their views on the trajectory of interest rates intact despite the historic upheaval in markets during the past few days” Not only that but a widely anticipated Fed rate cut could implode the carry trade as well. Or, maybe the next weak data point. In other words, bulls are trapped. There are two paths this “unwind” can take: Sooner or later.

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BOJ’s Mixed Signals Leave Traders Puzzled

The Bank of Japan (BOJ) has left traders uncertain about its intentions after delivering mixed messages regarding interest rate hikes. Governor Kazuo Ueda initially signaled that the weak yen was a risk and rates might rise, causing the yen to surge and Japanese stocks to plummet. In response, Deputy Governor Shinichi Uchida later stated that rate hikes were not imminent due to market turmoil, which calmed the markets but left investors confused. The BOJ’s communication challenges have increased market volatility, with investors questioning the central bank’s consistency and clarity as it navigates the unwinding of its long-standing monetary stimulus.