Summary:
Markets have been extremely volatile, and pressing questions about the future of the economy linger. Will inflation and negative GDP print decline? Furthermore, how will these factors affect you and your investments? Jim Welsh appears on this episode of FSN to inform us about what to expect in consideration of the role that the Fed will play over the next couple of months. We’re seeing increases in gas and oil, wage growth that does not mirror the progression of inflation, and depletion of supplies in the energy sector. Listen in for more insight on the mayhem of the markets, and scenarios for the foreseeable future.

Highlights:
-Jim was expecting a 10-15% pullback going into this year, accounting for trends in the S&P
-We’ve had the pullback from the highs, but the S&P needs to punch about 4200 to open the door for higher prices
-The Fed is at an interesting juncture that will play a role over the next few months
-Interest rate increases have adversely affected the economy, housing, etc.
-Consumers still have over $2 trillion worth of savings, but the bottom 20% of wage earners spend 70-75% of their disposable income
-The squeeze is already intense, and this is going to continue
-Wage growth (about 5-6%) is not parallel with inflation
-The Fed is trying to prevent the markets from getting ahead of them, which contributes to their decision making
-The increase in gas and oil in May will contribute a lot to inflation
-As they raise rates more, the economy will show signs of slowing in the next few months
-The Fed has started to shrink its balance sheet, which has not been paid attention to closely
-Jim thinks we may be on the cusp of a 15-20 year bear market; a lot of issues that have been building up with the US economy will most likely come to a head
-Is inflation down-ticking enough to give people on the Federal Reserve confidence that inflation is going to trend downwards?
-Gold needs to hold recent lows to make another run above 1900s
-When volatility increases, the relation between sectors moves upwards towards 1
-We need to see a break in oil, and subsequently, in gasoline prices
-We should be focusing on the price of natural gas rather than oil
-We’re depleting supplies that, in the past, would have gone to other domestic needs
-There is a floor underneath Natgas prices

Useful Links:
Financial Survival Network
Macro Tides