It’s been four decades since inflation has played such a powerful role in the economy and markets. How inflation goes will have a big impact on the level of interest rates, economic growth, and the direction of the financial markets.
Today central banks around the world have their work cut out for them. Global inflation rates are running far above the target inflation rates set by central banks. The U.S., the eurozone, and the U.K. are prime examples with high inflation and low targets. Countries like Poland, Russia, and the Czech Republic are under extreme pressure with extraordinarily elevated inflation. The two exceptions, China, where inflation is running below its target rate, and Japan, where they are about equal, are at the opposite end of the spectrum.
This week’s guest says inflation is the key to the economy and markets. He is Jack McIntyre, Portfolio Manager with Brandywine Global Investment Management.
McIntrye says the direction of the economy and markets is now all about how inflation is controlled. We’ll discuss how he is investing as that dynamic plays out.
Global bond manager Jack McIntyre says central banks around the world are determined to stamp out inflation. Their success will determine the direction of markets and economies. He explains how he is investing for several outcomes.
#inflation #thefed #interestrates
WEALTHTRACK #1910 broadcast on September 02, 2022
More info:
Bookshelf: Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice, …(read more)
LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
3:38 how can he be so naive and silly to take the Fed's PR statements as true when they contradict their actions time and again. They are the agency of "no pain" and live for today, as seen in their reversal from rate increases and QT back around 2018. They will do the same thing as the UK just demonstrated. When Greece and Puerto Rico went bankrupt, did they ever cut spending and get sanity? No, they played the fiscal fool till the end. And he thinks the Fed will be any different?
Ha! Rookie beliefs. Mark my words. The USA will inflate or die, and it won't die. The fiscal and trade deficits tell the story or a weak dollar ahead and of more inflation.
The ship of state has been run by selfish rats! Democ-rats like AOC who want to see us shipwreck out of spite and envy and resentment. The socialistic 'live for today' voters can't be trusted to vote the right stewards into office.
Great interview. With the current rate of inflation published at 8.1% for food, gas, utilities and not including rent from a year ago they have stated an average increase of $ 475 per month. If you are low income or fixed income where are you suppose to come up with extra costs? Answer you will not. The government can print money but you will be evicted and become street eligible.
Came to live in brazil over 10 years like and trader and analysis… Never see so much US big bank involved so much this few years here in stock market here they are just buying…
It is the best time to buy here……. Some blue chip is less -60% than last year… The best this company sell to china to us….
Neither US political party will raise much objection to the Fed raising its inflation target or taking longer to achieve their target because both parties are economically populist in orientation now. It’s only Democratic leaning economists from the days of Clinton like Larry Summers that are very committed to a low inflation environment. When the interest costs on US government debt start rising in earnest we will see how committed everyone is to low inflation. It’s not an accident that there was a push to index capital gains taxes for inflation during the last Republican administration.
cliches and bromides here with standard keynesian thinking. Learn nothing of importance here.
This guys is not making sense. He had to at the last minute say developed countries will outperform the US haha . Really give me a name.
He naively believes Powell really wants to defeat inflation. But that will never happen. Powell is a political puppet with no backbone. All talk and bluff. The Central Banks are bluffing. He will cave after one more token raise in short-term rates. QT will diminish as the media reports inflation reducing. It is utter nonsense that the Fed wants a 2% inflation target. We are in the throws of an inflationary spiral that will last several years. Don't drink the purple Kool-Aid. One year ago Powell insisted inflation was only transitory and no rate hikes were being considered. That was a puppet talking and he'll be back on that track by November. Once Wall Street starts to scream there will be a reversal to easing once again, and inflation will soar. Paul Volker is spinning in his grave.
A serious oversight from this guest speaker is his oversight of geopolitical issues in the world and the destabilization of commodities and poor leadership in the U.S. Federal Government that exacerbate poor economic performance and inflation. With a few exceptions global assets carry far greater risk than U.S. assets. I just don't see Jack's recommendations yielding returns.
Chilean bonds? Really?
Lol thank the central banks for fighting inflation, hell their the ones that caused it from the start.
We have inflation because congress spends money like drunken sailors and supply chain problems and the only tool the Fed has is jacking up interest rates leading to unemployment and recession. What a disaster.
@23:00 some of my friends bought Brazilian binds !
Reasonable views!
@9:32 the FED is independent not the other central banks in the world ! What a bizarre statement !
If there is a severe recession, the latin america will be default. Will not the bond be zero?
If inflation is so big reason to invest , do not do it. It means that inflation is huge.
Consuelo, your interviews are a giant step ahead in quality beyond any other stock market and economic videos I watch. The character and intelligence of your interviewees is profound. I always learn so much when I listen to you.
This is a smart and accomplished man but this inflation is a structural supply issue that these central banks can’t control . So the US and other developed debt is going to be refinanced at a 2-3% higher rate . On a 33 trillion national debt where does he think that 700 billion to 1 trillion in additional interest expense will come from? Everyone at the fed is putting on a soldier forward face. When the economy implodes we will see.
Thank you.
Bonds are certificates of guaranteed confiscation. – (Late) Dr. Franz Pick
Bear through 2023 – I watch the 10 year yield and USD DXY daily and believe that the Fed's Objective is to devalue both our $31 Trillion in US National Debts and the continual deficit spending by both parties. I'm not a believer that the Fed wants 2% target inflation and think they want a continuing higher level like 4%-5% ongoing. They've been trying to control, through long bond purchases, bond yields. Now starting in September, they have $95 billion a month (QT) to reduce their balance sheet of bonds and MBS. We may see the 10 year move up to 4% or higher if there are not buyers for these bonds. As the global markets demand USDs as the reserve currency for trading, to pay off US denominated debts, and to liquidate stocks, lack of liquidity could break the debt markets. We are entering years of Stagflation and like in the 70s, stock prices go nowhere daily (after correcting). Why would the Fed want higher inflation rates you ask, if you can't ever 'pay it back', if you do not want to default, all you have left is "Debasement of the USD". S&P 2500 target for mid-2023.
What a sensible level headed guy.
41% of my net worth has been out of the stock market for months. When the market drops to my number, I'll come back in. While I'm waiting, I'm creating multiple streams of passive income for cash flow. I'm changing my game!
Love the interview but I don't agree with the guest.
Thanks
Volcker didn't target interest rates, he targeted nominal GDP and let interest rates rise until it stopped growing. This is not the approach Powell is now taking, with nominal GDP rising well above the future supposed terminal fed funds rate of 4%. Also saving rates nearly kept up with inflation so savers were safe and holding savings made sense. Not today when people have to flee cash savings due to interest rates being so far behind inflation. There were many periods of raising interest rates during the Burns era, plus prices and incomes policy, ineffective policy to do anything but target nominal GDP.