Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cam Hui has been professionally involved in the financial markets since 1985 in a variety of roles, both as a quantitative equity portfolio manager and as a sell-side analyst. He graduated with a degree in Computer Science from the University of British Columbia in 1980 and obtained his CFA Charter in 1989.

Cross-Asset Strategist & Quantitative Analyst

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Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
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Cross-Asset & Quantitative Research

Cross Asset Strategy

Stock markets were rattled by the Fed’s hawkish tone in the wake of the FOMC meeting. Markets took a risk-off tone, but Jerome Powell walked back some of the hawkishness during his Congressional testimony the following week. In order for the markets to continue accepting the Fed’s transitory narrative, the next challenge for the Fed is cost-push inflation in the form of wage pressure.It is becoming apparent that wages are rising. It’s not good news for the suppliers of capital. It will translate into higher wages, which firms may not be able to pass on to their customers, a worker shortage, an operating margin squeeze, and ultimately, higher inflationary pressures.It’s also unclear how the Fed plans to resolve the conflict between its full employment and price stability mandates given that wage pressures could spark a potential cost-push inflationary spiral. Investors are well advised to monitor the evolution of wage pressures after each Employment Report and the body language of Fed officials in response to rising employee compensation.

Stock markets were rattled by the Fed’s hawkish tone in the wake of the FOMC meeting. Markets took a risk-off tone, but Jerome Powell walked back some of the hawkishness during his Congressional testimony the following week. In order for the markets to continue accepting the Fed’s transitory narrative, the next challenge for the Fed is cost-push inflation in the form of wage pressure.It is becoming apparent that wages are rising. It’s not good news for the suppliers of capital. It will translate into higher wages, which firms may not be able to pass on to their customers, a worker shortage, an operating margin squeeze, and ultimately, higher inflationary pressures.It’s also unclear how the Fed plans to resolve the conflict between its full employment and price stability mandates given that wage pressures could spark a potential cost-push inflationary spiral. Investors are well advised to monitor the evolution of wage pressures after each Employment Report and the body language of Fed officials in response to rising employee compensation.

The Fed's Next Challenge: Wage Inflation