Risky assets have been trading with declines today, as in most of the previous session, but markets have been relatively positive over the last few days. According to Morgan Stanley, that will change.
"We expect an adjustment soon. The upswing is driven in part by investors' expectations that the government will bring big fiscal and monetary stimulus. Risky assets may suffer when investors understand that central banks will give us less than we want.
The first chance will come on Friday when Powell makes a statement at Jackson Hole. Morgan Stanley believes that it will wait for a decline in global demand for US exports and trade uncertainty to hit the consumer sector before taking a more dovish position.
"The patient Fed means that the news has to get worse (in terms of economic indicators) before the Fed takes the necessary measures.
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