Trusted Economic Perspectives

If you follow the financial press, the conventional wisdom has come to the simple conclusion that the way to fight inflation is raising interest rates.

Some investors think the US is already in a recession. As we wrote two weeks ago and as recent data have confirmed, we don’t think that’s the case.

As we celebrate 246 years of national independence, our country is now more than two years into an economic recovery from the two-month COVID Lockdown Depression.

Real GDP declined at a 1.5% annual rate in the first quarter and, as of Friday, the Atlanta Fed’s “GDP Now” model projects zero growth in Q2.

We became bullish about stocks once mark-to market accounting was fixed in March 2009.

All eyes will be on the results of the Federal Reserve meeting on Wednesday when it announces how much it’s going to raise short-term rates, its new projections for the economy and short-term rates for the next few years, as well as Chairman Powell’s press conference.

JP Morgan CEO Jamie Dimon caused a stir lately when he talked about a “hurricane” hitting the US economy.

At the end of 2021, we set out our projections for the stock market in 2022: 5,250 for the S&P 500 and 40,000 for the Dow Jones Industrial Average.

No one can say that the Federal Reserve can’t do the impossible. At long last observers from across the political spectrum agree on one thing – that Jerome Powell and the Fed are well behind the inflation curve and have a lot of catching up to do.

When interest rates go up, many analysts start to worry about recessions. That’s not wrong to do, after all Federal Reserve rate cycles are important.