Is The Economic Plane Stalling?
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I was on Schwab TV Wednesday discussing the economy, the Fed and the impact on portfolios going forward. Summary:
- The market got ahead of itself with the “soft landing” narrative when, in reality, the Fed is far from being able to declare victory.
- The economic plane was slowed by the rate hikes, but is not currently stalling.
- The trends are mostly negative and so the Fed can’t keep flying the plane at this low altitude and slow speed or the economy will stall.
- No need for emergency cuts or inter-meeting cuts, but the Fed does need to initiate a rate cut cycle at the September meeting.
- Bonds: fixed income investors should consider front running the Fed and extending maturities.
- Stocks: for long-term investors any volatility is a buying opportunity. For short-term investors the next 6-9 months are fraught with risk.
Video Length: 00:08:36
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