Animal Spirits are Testing the Fed's Patience. Will Powell Smack Them on Wednesday?

Risk asset markets will continue to rally until the point at which the Fed gets uncomfortable that inflation expectations and actual inflation are running away from them again. Are we there yet?

The Fed/Treasury pivot in late Oct/Early November on a minor growth scare drove all yields lower for the rest of 2023 but that significant loosening of financial conditions has driven inflation break…