📝See Risk/Reward Tilted Towards Hawkish Fed: Citi Strategy

Current tactical setup is to trade the soft landing,

disinflationary narrative. Slower wage growth and lower

inflation gives the perception the Fed can further slow the

pace of rate hikes and avoid a hard landing.

Financial conditions are materially looser since the China

reopening began gathering pace at the start of November. Until

the FOMC meeting, financial conditions could loosen further

Risk/reward tilts to hawkish Fed. Base case is a 50bp hike at the February meeting, and we see that as

good risk-reward to pay. - Citi Strategy