In March, signs of inflation have subsided and bonds have rallied. Maybe the bond bear market Gross and Dalio foresee isn't actually going to happen. A lot of the future price action hinges on future monetary policy.
Market data don't speak to full employment right now. Inflation expectations would be rising. They don't speak to the 4 or 5% GDP growth Larry Kudlow expects either. Instead we should be wary of potential stagnation, even recession. And a…
Federal Reserve Governor Lael Brainard has given a defining speech that marks a regime shift in US monetary policy. She says that economic headwinds that favored caution have turned to tailwinds. The implication is a more aggressive…
There is a notable lack of long-run analyses of monetary systems and their stability. This column addresses this gap by looking at the monetary systems of major European states between 1300 and 1914. The evidence collected suggests that,…
Albert Edwards says the Fed will tighten more aggressively. The increase in interest rates will be a stimulant at first. But eventually, the higher rates will catch up with debtors.
Rising inflation expectations are pushing interest rates higher. But Fed moves matter more. If the data continue to show growth in the economy, markets will move toward the Fed and interest rates will rise.
The rise in inflation is necessary but not sufficient to force the Fed to tighten even more aggressively than it has forecast.
This month, we have seen an unprecedented increase in volatility. When the fundamentals take a knock, that’s when we should worry though. Let’s wait for the CPI next week and revisit this conversation.