Will the Fed Be Forced to Return to Monetarist Policies?
Since the beginning of 2022, global central banks, led by the U.S. Federal Reserve, have been raising interest rates, at times quite aggressively, in hopes of slowing global demand so it comes into better alignment with supply, thereby easing inflationary pressures. The mechanism has a predictable impact on interest-rate sensitive areas of the economy, like […]
If the Economy Is Becoming More Volatile, It Will Change How Pricing Works in Financial Markets. Investors Need to Have a Plan
Discomfort and risk are only acceptable in the case of the potential for greater reward. This statement is true in many walks of life, such as in challenging or dangerous jobs that demand higher salaries. This principle applies acutely to investments. The more volatile an investment is, the higher the return investors expect from the […]
Could Resurgent Interest Rate Differentials Send the Dollar Higher?
One prominent story of 2022 was the strong U.S. Dollar (DXY), which rallied 8.15% versus a basket of other global currencies, according to Bloomberg Terminal data – but at one point had appreciated up to approximately 20%. Accelerating inflation in the United States starting in late 2021 set a vigilantly hawkish Federal Reserve on an […]
With Inflation, Things Happen Fast. Investors Should Remain Flexible
The one buzzword most associated with economic conditions and the volatility plaguing the stock and bond market in the first half of 2022 is inflation. We will not use this blog to pile onto the available analysis and punditry about the sources of high inflation or to speculate about its future course. Instead, we will […]