we are seeing a lot of red on the screen and talking about selloff in europe and weaker banking numbers and earnings numbers the also weaker earnings stateside as well tech earnings not coming in in the green as we saw earlier in the week it feels like it is weighing on global sentiment is that your take as well maria yeah you are absolutely nailing it there the market currently is quite guarded we are in a rather boring period and it is feeling relatively good at the volatility that we had in the first quarter to have a boring month but be careful what you wish for because i think things are going to get worse before they get better here we are in a consolidation phase a lot of investors have the negative risks top of mind positioning is relatively bounce right now and people have been buying stuff that market breadth is relatively narrow you can see also the volatility has been coming down massively but the volatility of volatility is relatively elevated people are guarded and waiting for the next catalyst i think the next catalyst is going to come with the data that we are seeing currently coming out still stubbornly high inflation growth that is coming down but still strong enough and labor market strong enough that the central banks currently have carte blanche to go on tightening anna good morning and with that in mind where do you see the fed heading or should i say how quickly do you see the fed changing or heading in whichever direction because it does not seem to be a disagreement about which way the fed heads but about the timing some said the us economy is slowing fast and that is why they see room for cuts at the end of the year others think we are not going to get fed rate cuts this year what is your thinking maria i think the fed is currently going on i think 100 in may we will see another hike i don  t think the fed is actually going to cut from september onwards what market currently is pricing for the fed is what i think the fed should do at the time but not what they will do at that time because the data that the fed is looking at is mostly considering  considerably lagging it is not what the market is looking at and telling the fed you probably should slow it down at some point in may be cut the fed is not going to agree with that because they have to defend a decade of qe as a policy tool in order to have the tool available in the next crisis they want to make sure absolutely that they can bring inflation under control in our own  only going to stop doing that when they are sure that the tightening was successful anna maria as a global investor by which i may not and japan i wonder what you make of the bank of japan right now because we heard from them overnight of course there seems to be some people positioned for something different we have seen a move of 15 weaker in the yen as a result yield curve control getting rid of it is just delaying and it will happen later on this year that could have mobile the galatians  implications maria investors were relieved not to see a massive turnaround today in the policy and the coming occasion people may have missed a little bit that this is really giving them the optionality and buying them time to review the policy in more detail we can be relieved that is not today and tomorrow but down the road the bank of japan is super important for global markets japan has a massive asset pool that drives global market so everyone invested in us fixed income needs to follow the bank of japan as well once there going to change their assessment of their policy that  s really when you need to also take a hard look at your us fixed income portfolio for the time being relief kriti the japanese also seeing  seen largely at a creditor nation connect the dots for us when you see the lack of movement per se from the boj how does that translate to german balloons market or treasuries what kind of moves are we looking at here maria for the time being as said before i don  t think there is a big impact right now i think it would have been a shocker if also there was something really big to change at the first meeting of governor ueda for the time being i think it is ok to be invested in fixed income markets in europe and us one important detail that investors need to consider is that stealthy changing correlations that we have seen in the volatility in march and for the time being correlations are still relatively high and supposed to be high also during times when central banks are driving markets but we have seen during volatile phases correlations are changing the rates and spread correlations or correlation between equity and fixed income have become very negative for a short period of time that will repeat much stronger during the last phase of the cycle and that  s what you need duration in your portfolio it will work as a safe haven asset and a lot of investors are under invested in that portion of their portfolio that is something people can do right now during this sort of boring phase and reassess allocation and take a good look at your overall asset allocation y kriti what do we see from the federal reserve next week is the 25 basis point market consensus what we see and does that mean it is the end of this rate tightening cycle or do we see more hikes over the summer maria i think we  re going to see 25 basis points it  s depending on the sentiment and they kenexa go a little hawkish in their messaging but i don  t think they  re going to go to work cuts  go towards cuts anytime soon