#inflation #yahoofinance #federalreserve
Fitz-Gerald Group Principal Keith Fitz-Gerald and CapWealth CIO Tim Pagliara join Yahoo Finance Live anchors to discuss potential Fed policy in 2023, inflation, and passive versus active investing.
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As the U.S. economy continues to recover from the impact of the COVID-19 pandemic, all eyes are on the Federal Reserve to gauge when they will begin to taper off their monetary policy. While there is no clear timeline for when this will happen, many experts are turning their attention to the question of how much inflation the Fed will tolerate in 2023.
This question was recently raised by Bank of America strategist, Athanasios Vamvakidis, who argued that the most important factor in determining the Fed’s policy decisions will be the level of inflation in the economy. He noted that inflation has been rising steadily over the past few months, with consumer prices increasing at their fastest pace in over a decade.
According to Vamvakidis, the Fed’s current stance on inflation is that they are willing to allow prices to rise above their 2% target rate for some time in order to support economic growth and job creation. However, he believes that this stance may change once inflation reaches a certain threshold, likely sometime in 2023.
“There is a risk that inflation surprises on the upside and that the Fed may be forced to change its stance earlier than expected, potentially in 2023,” Vamvakidis wrote in a recent note to clients. “Our operative question is how much inflation the Fed will tolerate in 2023 and whether most FOMC [Federal Open Market Committee] members will still be comfortable with the current stance.”
Vamvakidis’s concern reflects a broader debate among economic policymakers and analysts about how best to balance the short-term needs of the economy against the long-term risks of inflation. While high inflation can fuel economic growth in the short term, it can also lead to higher interest rates, lower asset values, and a decrease in purchasing power.
Ultimately, the answer to the question of how much inflation the Fed will tolerate in 2023 will depend on a number of factors, including the pace of economic recovery, the state of the labor market, and the impact of government stimulus programs. However, as the economy continues to evolve in the coming months and years, this question will remain at the forefront of monetary policy discussions.
Some of the best positioned companies are spacs and unprofitable startups… because ideally you want to sell on a high, well last year those companies went public and collected cash at all time highs… some of them are better positioned than bluechip value
Declare recession already!!! I want a cheap car hahaha
Most people are okay with 3 or 4% inflation. It’s the MARKETS that really matter.
Tim Pagliara sounds extremely bearish and pessimistic. Thank God not everyone thinks like him otherwise this stock market will be a graveyard.
That's correct. No one believes that inflation will be below 2% or even 3% in the first quarter of 2023, which means the Federal Reserve will hike interest rates further to well above 5%. As you can tell from this video, you still have cry baby analysts complaining about the Fed's interest hikes when the fundamental classic approach to fighting inflation means that interest rates must be above the inflation rate to halt inflation. It amazes me how many BS analysts there are, but the good news is when they speak, it confirms the chances that their perspective is completely wrong.
Tolerate till his buddy's wanna buy back in to run it up again.
Raise those rates and keep them there.Keep TINA dead.
Fed is gonna have to come hard now that Congress passed that garbage $1.9T bill. Not only is 2023 going to suck, 2024 and possibly 2025 will too. Thanks Democrat voters, you f'n morons.
As much as traitor Joe wants. Shoveling Americas money everywhere but America
Pivot baby!