Inflection Points

Inflection Points

Traders and investors came into the new week staring down a formidable slate of data -- plus a Fed meeting. Jerome Powell and friends will doubtlessly leave their main policy levers unchanged, even as they acknowledge a steady improvement in the economy consistent with the idea that the US is at an "inflection point." Slack in the labor market and allusions to the transitory nature of any inflation spikes will provide more than enough cover to ensure the statement and Powell's general message i
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4 thoughts on “Inflection Points

  1. I see more of a pendulum swing than a long term direction going forward. I voted for Biden realizing the corner Trump painted US into.. Past experience tells me people only see what they want to see along pretty ideological lines in these scenarios ( like Today ). Give me Campaign finance and a viable Third Party and I’ll bet on a better more competitive viable outcome for the Planet as a whole. Divisiveness is near all time highs , still…

    1. I get what you’re saying but see it differently. Really, in the past forty years, the pendulum has been touched each period, held, ever so slightly, then let go. Gradually, over years, change occurred (mostly accruing benefits to certain factions) but was almost imperceptible to the untrained eye. Until, well, until the last few years where it’s obvious that the pendulum was knocked off equilibrium and no one can agree how it happened and when.

      I, too, was of the opinion that campaign finance reform and a third-party was part of the solution. We’re past campaign finance reform and past a third-party. (Who even talks about Citizens United any longer…wouldn’t this have been an obvious place to start?) Those are solutions that, if they were going to happen, would have happened years if not decades ago.

      We are in a hinge-y period, a period where we are going to have to invent new solutions, a new monetary system, a new global order, and new industries that create wealth and, hopefully, employee at least some of the millions who were cast off this last year. There is no going back in time. (Obviously, I’m in the modernization camp.)

      Let us hope these future solutions create a renewal of purpose, cast aside our current, hollow institutions, and give us an opportunity to move forward. Not everyone has to embrace the new institutions, only enough of us do. Let’s hope it doesn’t take a catastrophe to unite us.

      1. Oligarchy and a heavily financialized economy based on mass consumption and the burnng of fossil fuels is a dead end — or, more existentially, death. Time for a Green New Deal.

  2. One thought that I have which may or not be a consensus view is that the Fed is scared to death to talk about talking about a taper, do give advanced warning of it, to articulate a schedule for it given that too much guidance in 2018 taught them a lesson that there is a thing as too much transparency. So here is what they may do instead. QE tapering is the new rate hike. They won’t pre-announce. They will come to a meeting and decide at that meeting one of three things–taper, do nothing, or resume QE for that next 6-weeks and then they will adjust at each meeting. So there is no need to pre-announce. Best guess is they will dip their toe in Sept, but it could be later as they are going to want a lot of clarity on just how transitory inflation is against a backdrop of a highly uncertain macro backdrop which is an oversused phrase but really is the case give the shock and policy response was of such magnitude that there is no real playbook here.

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