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What $700 Billion Sees For Rates, Inflation And The Economy
Fund managers expect a soft landing. They also expect a recession.
If that seems contradictory to y
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Who’s better at this, the 265 guys with $700 bil AUM or the 65 “seers” and tea leaf readers who are members of the AEA?
Oop, my bad, 250 managers.
Can we have some fun here with our personal guesses?
I see a Fed not wanting to raise interest rates too much – because they don’t want to create a domestic banking crisis or an international debt crisis; while at the same time, the US Federal government spending continues to be significantly in excess of collected tax revenues- resulting in liquidity being added to the economy.
No way we will ever get back to 2% inflation (unless we stop printing money) and the stock market will benefit from the net effects of added liquidity less minimal interest rate increases.
Welcome to our new normal.
Money printing causing inflation is a story that has been repeated throughout the history of the world. In the 18th century, Louis XIV printed “billets de l’etat”, which the government used to pay bills, but would not accept as payment for taxes!!