Richard Bernstein, CEO and CIO of Richard Bernstein Advisors LLC, joins ‘Closing Bell: Overtime’ to discuss investment decisions in light of the Fed’s policy announcements, and why he favor investments in consumer staples, health care and utilities. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
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Investors around the world have downplayed the Federal Reserve’s commitment to combating inflation, according to Richard Bernstein, a prominent market strategist. Bernstein argues that this underestimation could have severe consequences for those who fail to heed the warning signs.
The Federal Reserve, the United States’ central bank, has recently shifted its stance on inflation. In response to rising prices across various sectors of the economy, the Fed has indicated that it will adopt a more assertive approach toward curbing inflationary pressures. This revamped strategy includes the possibility of earlier interest rate hikes and a scaled-down asset purchase program.
However, Bernstein claims that investors are not paying enough attention to the Fed’s actions. He argues that they have become complacent and are underestimating the central bank’s determination to rein in inflation. This complacency is evident in the bond and equity markets, where prices continue to rise despite inflationary pressures.
One reason for this underestimation, according to Bernstein, is the belief that inflation is transitory and will subside on its own. Many economists and market participants attribute the recent surge in prices to temporary supply chain disruptions and pent-up consumer demand following the pandemic-induced economic downturn. However, Bernstein argues that this view fails to consider the structural factors at play, such as rising wages, expanding government spending, and the potential for economic overheating.
Another factor contributing to investors’ underestimation is the so-called “Fed put.” This refers to the belief that the central bank will step in and support markets if they experience significant declines. This perception has been reinforced in recent years as the Fed consistently provided accommodative monetary policies during times of market distress. However, Bernstein warns that this time could be different, as the central bank becomes increasingly concerned about inflationary pressures. The Fed’s commitment to combatting rising prices may supersede its willingness to rescue markets.
Bernstein’s cautionary stance comes as market participants have grown accustomed to low interest rates and abundant liquidity, which have fueled asset prices across various markets. This complacency has driven investors to disregard potential risks and underestimate the impact of the Fed’s policy changes.
To mitigate the risks associated with underestimating the Fed’s actions against inflation, Bernstein recommends adopting defensive investment strategies. This may include reducing exposure to high-risk assets, increasing cash reserves, and diversifying investments into sectors that tend to perform well during inflationary periods, such as commodities.
Overall, Richard Bernstein’s warning serves as a reminder that investors should not discount the Federal Reserve’s commitment to combating inflation. The central bank’s recent policy shift, along with rising inflationary pressures, suggests that complacency may not be a prudent investment strategy. Taking proactive measures to protect portfolios against potential risks associated with inflation is crucial in today’s rapidly changing economic landscape.
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This dude wants us to sell our stocks so he can buy cheaper. GTFO dude! we are in charge, not you, Richard.
Minerd is wrong almost always
So BIDEN, says inflation is 0%; how come my food bill is twice what it was before he was elected.
Never underestimate Biden’s ability to F things up!!!
The big boys spread fear, the small guys bite, the big guys gobble them up.
You <,are so right, great insight! I started investing 2 years ago and read all the old old-school rules. Turns out, above fundamental analysis of a business, human emotion drives the stock market and always has, its just evolving, in no small part, as you point out, because of social media causing extreme polarization. Solid video. I think it is important for investors to note that while the market is experiencing a mini bear rally and it could be exciting, we are still down roughly 18% on the year. Great race analogy, we are still behind and I think come August with the release of another CPI reading on August should cause some more volatility. In my opinion, this is just the beginning of a recession, BUT overall an opportunity for investors who have time to remain steadfast in a strategy for the long-term! We have an obligation and a responsibility to be investing, the market is so volatile now to be depending on the bull run to make a profit or investing without guidance, I advise everyone never to stop investing, never to stop improving, never to stop doing something new and to trade now with an Advisory who has a great experience. Taking this decision some years back has been my best decision so far this year, i have been able to day trade my crypto assets and increased my trading portfolio to over 16BTC in profits with just 4.5btc his trade strategy and guidance from my advisor Expert Marshall Clinton I am able to scale through the crazy stock/crypto downtrend and saved my finances. You all in search of a way to recover your loses from the crash and accumulate more profits can reach out to her for crypto investment and for profitable trading system or mentorship. This is one of the best medium to backup your assets incase it goes bearish.<You all can reach him on ͲeIєɠɾαm>@MARSHALLCLINTON OR What'sapp✙19144550434 And always remember to share your experience with others.
This guy is only inside the box, via feds funds rate, should look outside the box as well oil at 82/barrel, possible Iran deal… he could be way off
My own fear levels are rising. Time to go balls deep in puts, thanks for the financial advice!
Whatever the news tells you. Wait a day and do the opposite. That's the code. If they say something is bad about a stock. They push it down that day then you buy then it rips
They need retail to sell out so they can profit more. Hedge funds are in a tough spot. Retail traders are getting smart and messing their game up so they shill on the news
These are lies. I'll bet 50 million dollars the market doesn't drop by mid october
This guy is just full of s**t. He is talking down the markets because he has puts on the markets. Barring from any exogenous events, this market will not collapse 20%. At most, it may test June lows.
200 points straight to the dome
The national debt at 31 trillion dollars . Enough said.
With inflation running at a four-decade high, a Recession is now the ‘most likely outcome for the economy. How can I grow my portfolio to outpace inflation and maintain a successful long-term strategy? I have been reading of investors making about $250k profit in this current crashing market, and I need ideas on how to achieve similar profits.
Apple with the emergency satellite is saving lives and improving our lives
I hear the Biden justice department is tying to go
After Apple and sue Apple sue to a complaint filed by a Chinese owned game company
How shameless is Joe Biden?
Who owns the bond market / can control the fed? Black Rock
Who owns the media coverage and carries weight? Black Rock
Who made a shift towards healthcare and energy early 2022? Black rock.
So as they continue to tell us tech is not investable they're essentially trying to delay to rise back up so they can buy low once they sell their energy and healthcare
This guest is kinda bitchy… snarky response abotu the four week prediction thing. hope he get’s humbled somewhere.
Shut up and just put all your money in the pot! They will take it when they please!!! Rigged
Minerd has a very bad track record. In 2019, before covid he thought a bear market was due. In the covid crash, he said stocks could fall so much more the fed would have to buy equities. Then in the spring of this year, he flipped said the bull market was back just at the height of a large bear market rally .. A monkey would guess far better
fed = 8.5 trillion
2020 u.s stock market = 93 trillion
2022 u.s stock markey = 48 trillion
market lost 1/2 of its value
where did the $ (your401k) went?
fed's wallstreet friends
people like like these while cnbc cheer on
or scar you off and they always find others to blame for problems they created
Thanks<, for all you do! I like your truthful coverage. Mad respect for educating everyone. BTC's price has been fluctuating lately, but I think we should be educating the newbies on what to do aside holding rather than discussing about the dip. The good thing about the space is that you can buy the dips and put them into active trades making profits from trades while confidently waiting for a pump in price because it is inevitable. Most people do not understand how the space works. Your advantage is understanding, Charts won’t guarantee what an asset is going to do. Prices will go up or down. Nevertheless, the market has been so profitable despite price ups and down. I've always played safe implementing trades with insights and signals from a renowned trader, Stacy Logan. I made 9.3 BTC from the recent crash in the market within a period of six weeks.
Equities remain overvalued
Love this. The same idiots who gave us inflation will now give us a recession, a double whammy for the working class while they just get richer and richer. Worst case scenario, they just get another multi-trillion dollar bailout with our tax money while the rest of us get all the suffering and pain. God bless America!
Cool! So sell all our stocks now and wait for everyone else to sell their stocks down 20% from here then buy it all back? Hahaha. Ok Wall Street!
The thing that all of these experts fail to take into account is that the politicians will never act fiscally responsible and they will continue to encourage the FED to print money thereby worsening inflation.
The fed wont have to do much other than keep rates high.. do you think they waited so long to raise rates on accident? US economy so strong that the hikes wont even put a dent in the consumer.
Who cares, only thing correct is market (of course at the end of the day). Can not invest based on what should be.
He's just mad cause things aren't going his way. Greedy.
Qqq will tell us what the market will do tomorrow https://m.youtube.com/watch?v=WU4DaEgzyb4
Every bear looks like a genius in a bear market, just as every bull looks like a genius in a bull market. Right now the bears are quickly becoming the lemmings that they accused the bulls of being during the bull run
Sentiment is 53% bearish. This market bottomed. Everyone is bearish
SPY is fair price from 390-410. The next year depends on earnings which depends on inflation. No one can predict the future so just keep buying.