Beware a “Gridlock Rally”. Gridlock has been good for stock market investors in the past few decades, particularly when there’s been a Democratic president and the Republicans in control of at least one house of Congress.

Drop in Budget Deficit is a “Sugar High”. Look for bigger budget deficits in the next few years as the revenue “sugar high” wears off.

The Last Hurrah? An economic storm is coming. The sun is still shining today, but, with almost all the net growth in Q3 coming from the trade sector, the clouds are forming on the horizon.

No Recession, Yet. We are not “recession deniers,” we just don’t think one has started yet.

More Trouble Ahead. Why a recession?... a monetary policy that’s tight enough to control inflation is going to send the economy into a recession.

Will Higher Interest Rates Tame Inflation? Interest rates don’t determine inflation; the amount of money circulating in the economy determines inflation. And this is where the problem lies.

The Fed: What to Expect and What to Watch... the Fed is almost certainly going to raise rates by three-quarters of a percentage point (75 basis points), just like it did back in both June and July.

Economic Data...One thing we must remember when looking at economic data is that everything is distorted.

Silly Season-Interpreting Economic Reports. The bottom line is that, for now, the economy continues to grow and inflation remains a very serious problem.

Monetary Muddle...The Fed has never managed policy under its new abundant reserve system with inflation rising this fast. No one, even the Fed, knows exactly how rate hikes will affect the economy under this new system.