The problem – for investors – is that the precedent may no longer be sufficient as policy intentions are now far more nebulous when it comes to the probability of an imminent central bank intervention, either verbal or physical. As BofA admits, “since the last stress signal in 2016, rates and inflation expectations have increased, we have a new Fed chair, and CB rhetoric appears more hawkish, creating uncertainty over where the “CB put” strike sits today.”
And that’s the $6.4 trillion question: at what level – if any – in the S&P will central banks step in?
