This note looks at the question of how we should think about a Fed pivot, which is priced for 2023. Ultimately it will be contingent on the outlook for the unemployment rate and how it feeds through to wage- and rent- inflation, but also a higher NAIRU which should make the Fed less responsive to an easing in the labor market. In this context real yields already look low as we more or less are priced for a 2019 type Fed pivot. Overall being paid real rates instead of nominals looks like the better way to play for a more stubborn/hawkish Fed as it could perform in greater number of scenarios. Since May we have been ... (full story)