Yankee legend Yogi Berra famously said, “It’s deja vu all over again,” one of his many memorable expressions. That’s the way I feel this week.
The “deja vu all over again” is the theme of “Don’t fight the Fed.” The Federal Reserve’s recent pivot from inflation promoter to inflation fighter puts that adage front and center in the current debate between the bulls and the bears.
This week’s guest has been following that dictum during his 40-year investment career. He has been bullish since the Fed opened the monetary spigots in 2009. He is Ed Yardeni, a Ph.D. economist, long-time Fed watcher, and investment strategist who is widely followed by institutional investors.
He is also the author of several books. The latest, In Praise of Profits! is dedicated to progressives to help them understand that “profits isn’t a four-letter word.”
Another Yardeni book is Fed Watching for Fun and Profit: a Primer for Investors, which we discussed in-depth in an earlier interview. In that book, he wrote: “To do this job well, I’ve learned that nothing is more important than to anticipate the actions of the Federal Reserve system’s Federal Open Market Committee (FOMC) which sets the course for monetary policy in the United States.”
Given the Fed’s change of policy from easing to tightening I asked Yardeni if he was becoming less bullish.
00:00 Hello
00:36 Introduction
02:29 Interview with Ed Yardeni
23:21 One Investment
24:10 Action Point
WEALTHTRACK Episode #1833 broadcast on February 11, 2022
More Info:
Bookshelf:
Fed Watching for Fun & Profit: A Primer for Investors
In Praise of Profits!
Martin Zweig’s Winning on Wall Street
#bullmarket #interestrates #inflation…(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
Inflation and interest rates are two of the most closely watched economic indicators. Inflation is a measure of the rate at which prices for goods and services are increasing, while interest rates reflect the cost of borrowing or the return on savings. Historically, higher inflation has often led to higher interest rates, and vice versa. However, with the global economy still recovering from the COVID-19 pandemic, many analysts are predicting that we could see a bullish case for higher inflation and interest rates in the near future.
There are several factors that could contribute to higher inflation. The first is the unprecedented amount of stimulus spending that has been injected into the economy by governments across the world. This has led to an increase in the money supply, which could lead to higher inflation as more money chases after the same goods and services.
Another factor is supply chain disruptions. The pandemic has disrupted global supply chains, particularly for commodities such as lumber, metals and semiconductors. This has led to increased prices for these goods, and this could ultimately trickle down to other areas of the economy as well.
Finally, there is the issue of labor shortages. Many workers left their jobs during the pandemic and have not returned. This has led to a shortage of workers in many industries, which could put upward pressure on wages. Higher wages could lead to higher production costs, which could ultimately lead to higher prices for consumers.
So what does all of this mean for interest rates? If inflation does indeed start to rise, central banks may have to raise interest rates in order to keep it under control. This is because higher interest rates can help to slow down spending and borrowing as well as encourage saving. However, central banks also need to be careful not to raise rates too quickly, as this could stifle economic growth and slow down the recovery from the pandemic.
Overall, the bullish case for higher inflation and interest rates is not something that should be ignored. While there are still many unknowns about the economy and the ongoing impact of the pandemic, the potential for inflation and interest rates to rise is something that investors and policymakers should be prepared for. As always, careful analysis and thoughtful decision-making will be key to successfully navigating these uncertain times.
Yardeni is very knowledgeable about the energy market. But his reasoning for macro allocation make little sense. It's not a good idea to find an expert in one area and expect them to be knowledgeable in all areas. Be careful.
He’s not close. The national debt was less than 40% of GDP when Volcker had to raise rates to 20% plus to beat inflation. Now in just the last four years that debt is up 50% to 130+% of GDP. Like almost everyone else Ed doesn’t seem to understand this inflation is structural . Everything is going to reset painfully .
The rising stock market is a measure of the wealth being sucked out of the real economy for the benefit of the rentier oligarchy.
Best wishes Dr Ed! This is a man with clear vision. Excellent track record over many decades. He's not always right but he's always close.
Productivity is due to technology ( not more jobs, technology is replacing jobs).
With the amount debt we have, any increase in interest rates is catastrophic. There are a lot of speculators in real estate and the stock market. Good grief. Margin debt is up 42% and close to 24% of real estate is paid with cash due to big funded speculators.
Counselo and Yardini are paid by 4 stock investment companies for this message of bs
Gold is at $1900.
Markets are approaching lows of 2 years ago.
US Government now has $30 TRILLION in debt – first country in history.
This channel is paid for buy stock investors. ADD THAT ALL UP
SHORT EVERYTHING THIS GUY HAS TOUCHED.
Yardeni is the best on”Wall Street”
I have ZERO confidence in this guy’s opinion.
Thanks for providing information versus selling drama or news.
I just shake my head…
Well, when you're so deep in debt you can't pay your way out of it, you hope for inflation to make tomorrow's payoff less painful. Only the parasitic class of American investors could think of such a ugly thing to do to the working class. These parasites make money off the sweat of the people who create the wealth, but typical of the mentality of the greedy bastards, they're willing to kill the goose that lays the golden egg. Sick, just sick.
remember it's the business man the owners that being's the prices up, it's called greed, go taxes the federal reserve bank! you're make everything back and more! that's what they say on youtube!
A market pullback against a rising economy is buying opportunity. If you look at quarterly chart of Dollar index and attach 20 and 50 period of moving avg, you will see that the economy is on its uptrend and not at the late stage of this trend.
Back in the period of 2003~2008, stock market was up against a declining 20 and 50 moving avg on this chart, meaning against a declining economy, stock market crashed in 2008, but this is not the case in the relationship of current stock market with its underlying economy.
Well, I appreciate the honest comments, you have look at prices and earnings. Who will want to step up and buy real estate, stocks, or commodities at these levels? Answer, nobody!
Sure Ed, all the news is good…what is good about it?
Yardeni is getting hammered lately. Nearly all of these guys are correct for a period of time and then get hammered. Buffet is one of the only ones that has been consistantly correct for the most part.
Looks to me that Dr Ed is drinking AI, Cloud & EV koolaid- not sure as an economist, how much he really knows about these technologies deep down
Analyst said that US inflation is a market opportunity to buy crypto during this 1st quarter. I buy more on Ardano, Gala, and GXC..
All I can say is wow. Typical mm b.s
Economists still cannot predict the turning point.
I especially like his answer on US debt. Summarizing: "Aren´t you worried on th level of US debt public and private? No. Why? Because it is worse elsewhere!" Great answer! I feel better now…
Would Fed ever run out of liquid from spigot? If not, it is God like.
You cannot create wealth from thin air. It is charged to future, when is the sold out time, no more buyers.
If Russian invades Ukraine, or PRC invades ROC, that will be a time of recession.
Have not heard an interview I could agree more with!! Great performance!! Thank you very much!!
I agree that the market is overreacting and we will see a big swing up in the second half of the year when inflation starts to descend. Great show and knowledgeable, reasonable guests.
How will transforming from gasoline powered cars to electric cars help economic growth.An electric car doesn’t have a big engine block or crankshafts or camshafts or ignition systems and mufflers etc not to mention the need for basically zero motor oil in an electric motor.All. those companies making old tech will disappear so how will that help economic growth?
Grantham is talking Super Bubble, but says correction to $2500 SNP (being a bit generous)
That just does not make sense
When a super bubble burst's the minimum retrace is 80%.
That would mean SNP 500 well and truly below 1000
I think Grantham is dead wrong as usual, 50% drop just does not make sense to me.
The Fed is way behind the curve on inflation and it's going to get worse before it gets better. In whatever form/shape "Volker 2.0" happens, it'll be at a time when the markets are least able to digest it. Grantham doesn't have perfect timing but this bubble call will be one final big win under his belt before his retirement.
Ed's opinions appear very similar to Tom Lee of Fundstrat.
Must have been Prerecorded.
Perma Bull is a set-up for disaster if you listen to this guy. Buyer Beware.
1% rate increase is not the end of the world? Mortgage and subprime car loans will go bust for sure, not to mention the record high leverage in crypto &stock market. And how about emerging market debt bomb?
Ed’s a great guy.
Yardeni is a perma-bull. Aside from Grantham nobody on Wall Street has advised to lower portfolio risk because it is bad for business.
What is he smoking ?
what will autonomous vehicles do?