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Stocks’ Fate Hangs On A Star
The r-star debate has well and truly gone mainstream.
Ahead of Jackson Hole, Wall Street Journal "Fed whisperer" Nick Timiraos penned a not-so-subtle piece on the subject. It's called "Why the Era of Historically Low Interest Rates Could Be Over." You could read it. Or you could just read the deck: "Higher productivity and increased deficits could raise the ‘neutral’ rate of interest."
There you go. As noted here on Sunday, the neutral rate debate will feature prominently at Jackson Hole.
I just can’t help thinking that Friday could be some fun. I also can’t help hearing the rising sound of whistling past the graveyard. In my aging mind I seem to remember that the Jackson hole gala used to be in Chicago and was called the bank structure conference. Many papers about banking and money. Monetarists were thick on the ground. I went a couple times. Pretty boring. Higher forever will be fine with me. Separate the sheep from the goats. Even at my age, like Buffett I keep investing my income. While higher rates create falling knives, I have a ton of that I don’t have to sell. Meanwhile, higher rates means more current income and more new capital. It’s working good so far.