An increasing number of experts and pundits are expressing the opinion that there is a dollar-fueled bubble in food and energy (and to a lesser extent, U.S. treasuries). The question is: what will the Fed do about it?
Judging by the street consensus, as measured by Fed Funds futures and various Wall Street polls, the Fed will probably cut 25 basis points and then pause. If only this were true (or better yet, the Fed pauses on April 30th). Unfortunately, I am not optimistic that "Helicopter Ben" will shed his moniker.
This does not mean that I am changing my opinion that shorting oil and long treasuries and going long bank and finance (equity and fixed income). Eventually the Fed must pause and then tighten. Since timing an absolute bottom is difficult and correctly doing so requires luck much more than skill, I have no desire to leave my fate to the agents of fortune. I am already long bank and finance and short long treasuries and oil. My God have mercy on my portfolio.
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