The Fed Wants You to Lose Money!
As we enter the second week of October, the prospect of a policy pivot by the Federal Reserve is fading yet again. For those who pay attention to the economic data, which suggests sticky inflation across wages and rents, this should not come as a surprise. As a result, markets remain exposed to decelerating economic growth and decreasing financial liquidity. These two quant factors are rarely positive for future stock performance. In this week’s market update, we discuss what we think the impact that this macroeconomic backdrop has on asset prices and what it means for portfolio design.
Key Takeaways:
- Use stock market rallies as opportune moments to reduce risk
- We think the FED can’t save the stock market when inflation is high
- We believe it’s hard for the Fed to save the economy
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