Respect the Bear... given the recent hastening by the Fed in the pace of rate hikes and policymakers' lack of focus on what they really need to do — a targeted and persistent reduction in M2 growth — we no longer think equities are going to reach a new high (an S&P 500 north of 4800) until one of two things happens.
50% or More? All eyes will be on the results of the Federal Reserve meeting on Wednesday...Powell made it very clear the Fed anticipated raising rates.
Whipping Inflation. Ultimately, inflation is always and everywhere a monetary phenomenon, as the late great economist Milton Friedman used to say.
We Are All Keynesians Now...The way out is to cut spending, cut tax rates, cut regulation, and tighten money enough to stop inflation. Because in the end, Keynesian policies don’t create wealth…free and open markets do.
Inflation Games. Inflation is a political lightning rod... Politicians blame war, or COVID, but the simple explanation is just too much money creation.
What the Feds "Should" Do. There is a time and place for gradualism in monetary policy, particularly when the unemployment rate is still above normal or when inflation is only a little above the Fed's long-term target. This is not that time and place.
It’s the Money! With every passing month, politicians and economists try to blame inflation on anything but excess money growth.
Rate Hikes Finally on the Way. The best reason to implement a larger Quantitative Tightening is that the Fed needs to counteract the excessive growth in the M2 measure of the money supply that is the root cause of higher inflation.
The 2021 Finish: Fast Growth, High Inflation. At present, we estimate that real GDP grew at a 5.7% annual rate in the fourth quarter. If we're right, then real GDP grew 5.2% in 2021 (Q4/Q4), the fastest pace for any calendar year since the Reagan Boom in 1984.
Who Gets the Blame for Inflation?... politicians across the political spectrum are working overtime to find someone to blame and attack. What they're missing is that there is no consistent historical relationship between higher spending, larger deficits, and more inflation.