Macro View We have competing agendas: the Fed is trying to curtail the impact of rising inflation and provide confidence to the market that it knows what it’s doing.  Meanwhile the economy is showing signs of surging as the Omicron variant declines, workers are getting back to work and more of the economy is opening […]

Monetary Policy The Federal Reserve announced a more aggressive switch to its accommodative monetary policy this past week. In doing so, the Fed is acknowledging inflation is more persistent than it had previously hoped or believed. During the Financial Crisis of 2008, the economy lost over eight million jobs, and it took nearly three years […]

Risks to the Market Market volatility is spiking. Volatility, measured by the VIX, is approaching levels similar to last January, when the market was navigating the GameStop news. The increase in volatility is a reflection of investor sentiment expressed through an increase in buying of put options, a method of portfolio protection. With equity valuations […]

Risks to the Market We have quickly become accustomed to new vocabulary words, such as “double vaxxed” and “Covid variant.” The global pandemic continues to shape the capital markets, global economic growth and how investors view risk. A market is a clearinghouse for the price of risk. Markets have a way of digesting risks and […]

With the rate inflation running over 5%, will the Federal Reserve keep interest rates low? In our opinion, the answer is no, they will not. Since the Financial Crisis, the Fed has longed desired a scenario of economic growth accelerating above 2.5% and inflation tipping over 2%. Now, with inflation running at a solid 5% […]

The Labor Force Participation Rate is Stuck During the early weeks of the pandemic, nearly 8 million employees lost their jobs as companies closed down. Through the last year and a half of the pandemic and the reopening of the economy, over 4 million jobs have been created, and the unemployment rate has dropped to […]

The Economy The acceleration in the rate of Inflation is real. According to the Bureau of Labor Statistics, wages in the United States increased 4.6% annually in the third quarter of 2021, measured by the Employment Cost Index. We expect wage pressure to continue into the end of the year as companies look to expand […]

Last week, interest rates moved higher, stocks moved higher and earnings moved higher. The headline this past week read, “Budget Deficit Declines from Prior Year.” However, the real story is more sobering. After a record budget deficit in 2020 of $3.2 trillion, we incurred the second highest budget deficit of $2.8 trillion this past fiscal […]

Through the pandemic, demand has remained strong while supply has been disrupted. We are seeing supply chain disruptions in raw materials, manufacturing, single family homes, and the labor market. Amidst a shortage of workers, we are seeing the power shift in the labor market from employers to the employees. Last week, nearly 10,000 members of […]

So far this year, the performance of Chinese equities is down -40% after the government had initiated a wave of antitrust and regulatory actions and taken steps to reign in its technology companies. Any investor that has been active in the global financial markets over the past 30 years should not be surprised by the […]