As we noted last week, we believe that as 2021 progresses, we will have a drumbeat of increasing analyst expectations for GDP growth and economic activity. The past year’s pandemic-driven economic gyrations have been so severe that economists and macro strategists — who as a group are not the most Read more
Reading time: 3 minutes For many years, Guild has compiled and tracked a neutral inflation index which we call the Guild Basic Needs Index™ (GBNI). We designed it to be a simple analysis of the real state of the inflation experienced by consumers — an unchanging basket, unmanipulated by rebalancings, Read more
Reading time: 4 minutes The U.S. Market The U.S. is undergoing a rolling correction as industry after industry corrects and then stabilizes. Higher interest rates will benefit some industries more than others, and the key is that the industries most benefitted by higher rates are only benefitted as long as Read more
Until the pandemic broke last spring, all eyes were on the yield curve — the spread between short and long-term interest rates. The inversion of that curve is thought to augur the approaching end of a period of economic expansion. When long term (usually ten-year) rates drop below short term Read more
Our first note of 2021 made the case that the events of 2020 heralded the return of inflation. We made two main observations. First, the Fed’s adoption of average inflation targeting, which would give the central bank cover to tolerate persistent inflation above the 2% to make up for the Read more
Of the critical macro variables for investors to watch, inflation is one of the most important. Current inflation, as well as prospective changes in inflation levels and direction can result in very different outlooks for asset classes, sectors and industries, and entire economies. In the post-2008 era, broad inflation has Read more
Back in late August, the Federal Reserve announced a new policy framework. It pledged to target an average inflation rate of 2%, letting it run above 2% for potentially prolonged periods; and it said that it would not respond to an improving employment picture with pre-emptive rate increases. Around the Read more
The great debate is on: inflation or deflation? Which will win out, the massive fiscal and monetary impulse coming from the Federal stimulus measures and the huge Fed-fueled growth in the money supply? Or the sharp contraction in spending resulting from the lockdown, with all its knock-on effects? Much hangs Read more
With the unedifying spectacle of the first Presidential debate behind us, and the election just over a month away, we believe markets are continuing to shift into a mode driven more by politics than by the pandemic. Daily new U.S. confirmed cases and deaths are at the same levels as Read more
Gold’s rise continues. Since the shock-and-awe fiscal and monetary response to the covid shock got underway in March and April, we’ve been pointing out the obvious long-term impetus it would provide for gold. We won’t rehash all the data here — the big picture is obvious enough. The monetary expansion Read more
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