Reducing Our Stock Market Forecasts. Given the surge in long-term interest rates this year, the US stock market is now fairly valued for the first time in over a dozen years, dating back to the Panic of 2008.

Slower Growth in Q1...Because of the shutdown and government actions growth has been uneven...will start to balance out during 2022 and beyond.

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.

It’s the Money! With every passing month, politicians and economists try to blame inflation on anything but excess money growth.

Will Russian Sanctions Lead China to Sell U.S. Debt? The US debt that China owns is more problematic for China than it is for the US. Moreover, if China sells US debt because it fears sanctions, then it will likely sell European debt as well. In the end, it’s not the US that has a problematic conundrum.

Thoughts on Ukraine. So far, things haven't unfolded as many thought they would. Supply-chain issues for the Russian military and formidable opposition are slowing Russia's advance. In addition, more sanctions and military help from countries around the world have given many hope that hostilities end early with Russia falling well short of its goals.

Sticking to Our Targets, For Now...The bottom line is that the winds of change are blowing hard in 2022: COVID is winding down, borders are in flux, and monetary policy is in for a major and long-overdue shift. In spite of these changes, we think equities are likely to rebound from recent strife and work their way higher this year. The bull market in stocks won't last forever. But, for now, it isn't at an end.

Russia and Rate Hikes...The financial markets have been on tenterhooks lately for two main reasons: Russia and rate hikes.

Not All That...rarely have we seen an economic report as misinterpreted as Friday's jobs report.

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.