Despite First Signs of Easing Inflation, Spiking Food/Energy Prices May Cause Recession

We live in a highly interconnected world, not only via internet, but economically.  The Russian aggression and subsequent sanctions are going to have worldwide economic consequences, none of them positive.  Add to that the already weakening U.S. economy and a Fed just beginning its tightening cycle, and you have the makings of recession. Employment – […]

Market Turmoil: Is Fed Tightening a Policy Mistake?

Market Turmoil:  Is Fed Tightening a Policy Mistake? The market moving headlines this week involved a stronger than expected Q4 GDP growth print and a much more hawkish Fed (Powell) than the markets had priced in.  “Volatility,” a word normally used by floor traders when markets have huge sell-offs, truly fulfilled its meaning this week […]

The “Stealth” Bear Market

The “Stealth” Bear Market A very poor 2022 start for equities, off to their poorest start since 2011.  Fixed income markets  are faring no better with the 10-Year Treasury up 26 basis points since New Year’s Eve (1.77% vs. 1.515)(Bond prices fall when yields rise).  In addition, the yield curve continues to flatten (short-term rates […]

Outlook: 2022 Growth Will Likely Disappoint

After years of trying to move inflation higher (the elusive 2% inflation goal), the Fed’s ultra-easy QE policies along with plenty of help from the fiscal side (“helicopter” money, and outsized fiscal deficits) have more than accomplished the goal.  Overshoot is an understatement!  The financial media tells us every day that inflation is at a […]

Against All Odds – Equities at Nosebleed Valuations in 2022

It appears that the Santa Claus rally did arrive and right on time spurred on by the continued hope that the Democrats could still save Biden’s Build Back Better $2+ trillion spending plan (more government stimulus) and the emerging view that the omicron variant of Covid produces milder symptoms and fewer hospitalizations/deaths than originally feared […]

Why Interest Rates Are Falling

#*!? CRASH BAM @#$ Suddenly, markets (well, at least the bond market) now see falling interest rates in the short and intermediate term. The 10-Year U.S. T-Note fell from 1.47% on June 30 to close at 1.29% on Thursday July 7 (a big move in just four market sessions). Some of the rapid fall was due to […]