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Tag: Federal Reserve

Stagflation Is Coming Soon, Staying Awhile: Axel Merk (Szn 4, Ep 25)

Published September 21, 2022

This podcast episode was recorded on Sept. 16, with a short highlight clip containing the most actionable items released to premium subscribers that same day. The full episode was released to premium subscribers without ads or interruptions a day after recording. 

Axel Merk, president and chief investment officer at Merk Investments, joins the podcast to discuss his views on stagflation, the Federal Reserve, U.S. dollar, and why the bottom is not yet in for stocks.

Content Highlights

  • Printing money does not fix supply issues. Next stop: Stagflation (2:59);
  • The current environment simply is not conducive to taking risks (11:15);
  • There’s too much groupthink at the Fed and it’s time for Jerome Powell to step down (13:21);
  • The bottom for stocks is not in yet. The Fed needs to pivot first. What to watch for there (15:26);
  • Background on the guest (24:43);
  • The outlook for gold (31:20);
  • How high might the Fed go with interest rates? (34:09).

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Inflation Will Ease, Fed Hikes Will Not: Richard Excell (Szn 4, Ep 24)

Published September 14, 2022

Richard Excell, former prop trader and portfolio manager and currently a professor of finance at Gies College of Business, joined the podcast to discuss his outlook on the economy, inflation, Federal Reserve interest rate policy, and more.

Content Highlights

  • The outlook on inflation: 5% by December, but don’t expect the Fed to ease off of rate hikes (7:14);
  • Can the Fed engineer a soft landing? It has succeeded just three of the last 14 times it hiked rates… (9:34);
  • We may not see a housing price decline on a national basis anytime soon (14:05);
  • Expect a 75 basis point rate hike at the next FOMC meeting on Sept. 20 — and again at the subsequent meeting in November, even though the economy should not start to brake until next year (16:11);
  • Background on the guest (22:02);
  • Views on asset allocation: more constructive for bonds than equities at present (27:03);
  • A recession will happen. The good news: it may be mild… (32:30);
  • How much of a concern are global issues in Europe and China? (35:40).

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Back to School

Published September 6, 2022

The following is an amended version of the Sept. 6 Daily Contrarian. This briefing and accompanying podcast are released to premium subscribers each market day morning by 0700. To subscribe, visit our Substack.

It’s Back to School week in the U.S. People are back from holiday. They may still be working from home but schools are back in session. In France they call this la rentrėe, the return.

Back to School sale at Walmart in Newburgh, N.Y. Source: Wiki
Back to School sale at Walmart in Newburgh, N.Y. Source: Wiki

Trading volumes should no longer be subdued this week. Major indexes in the U.S. are staring at three straight weeks of losses. The Nasdaq is actually down the last six days in a row. The energy crisis in Europe is a known event now, though there will likely still be shakeout like insolvencies that have maybe not been reckoned with.

Remember that a common trait of bear markets is to see a rally from futures and in the early trading hours that soon gives way to selling. We had that a couple of days last week and today (Monday) it is playing out again.

Having said that, the day-to-day movement is the domain of day traders, aka gamblers. We try not to get distracted by that. Has there really been something to reverse the negative sentiment? The Fed is still raising rates. Quantitative Tightening is here. The punch bowl is being removed from the party. Already has been, in fact.

Consumers are still going strong in the U.S., inflation or no. Anecdotally, your author visited a suburban Home Depot (HD) this Labor Day and found it packed with shoppers. See the instagram for more.

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