Two weeks ago, we briefly mentioned the worry some investors have that the Fed’s response to the coronacrisis could result in uncontrollable inflation, or even hyperinflation. At first blush, the expansion of M2 visible since the Fed’s crisis stimulus seems to justify the concern: However, while the broad money supply Read more…
Even as the recovery of stock markets from the March and April decline continues and broadens, investors’ attention remains focused on Federal Reserve policy. As we described last week, Fed policy has been instrumental in preserving financial stability, not only in the U.S., but globally. With the initial crisis past, Read more…
Paul Volcker, the venerable former chairman of the Federal Reserve, is credited with slaying the dragon of 70s stagflation during his tenure as U.S. central bank chief. Long afterwards, he was still pushing for sound monetary policy and financial regulations through his think-tank, the Volcker Alliance. He died Sunday at Read more…
Will Ramping Inflation Cause More Problems For Markets? The correction that began on January 30, and which may not yet be over, was triggered by several events. The fundamental events were first, the release of new data showing rising wages; and second, increasing acceleration in the rise of long-term interest Read more…
Manufacturing PMIs Increase — Is Inflation Coming? The current uptick in global GDP growth means that manufacturers in many countries are experiencing higher demand. As purchasing manager index (PMI) reports come in from around the world, they are showing supply constraints beginning to emerge. Manufacturing PMIs are surveys which ask Read more…
The Markets In 2017: Inflation, Stocks, Bonds, and Gold Despite headlines declaring that the post-election rally is running out of steam as we head towards Inauguration Day, we continue to be optimistic about the prospects for the U.S. stock market for over the next several months. Later in the Read more…
Market Summary The key to global stock markets is the U.S. dollar and U.S. interest rates. We have all seen U.S. interest rates rise, and that is potentially difficult for developed and emerging markets. Developed markets will be impacted as yield instruments become more competitive compared to stocks. Emerging markets Read more…
Notable Trends in Global Markets Let’s look around the world at a few big trends. Trend number 1: inflation is coming back in the U.S. and in some countries where the currencies are falling — and this means interest rates, if not rising worldwide, will rise in the U.S. and Read more…
Don’t Fight The Central Banks European QE is ongoing, and we believe it will have the same effect in Europe that it did in the U.S. — boosting stock prices. We think that dividend-paying exporters will do particularly well. Europe is not the only place where easing is still ongoing. Read more…
Executive Summary 1. Low inflation in the crosshairs of global central banks. From rate cuts in India, Canada, Singapore, and Peru, to the initiation of a large sovereign-bond purchase program in Europe, governments and central banks around the world are stepping up their fight against the anemic inflation — or Read more…
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