Stock Markets and the Economy
Found 234 Articles.
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The Fed Is Fighting a Two-Front War
The Federal Reserve is fighting simultaneously for both price stability and financial stability. Because the Fed pumped too much money into the economy in the years before 2022, high inflation became self-sustaining, causing the Fed in 2022 to engage in perhaps its fastest and most aggressive monetary tightening ever. Negative effects of the tightening are […]
When Your Bank and Retirement Accounts Can Be Seized
The recent failures of Silicon Valley Bank and Signature Bank almost triggered the first use of the “bail-in” established in the Dodd-Frank financial regulation law enacted after the financial crisis of 2007-2009. The federal government prevented use of the provision and acted to protect large accounts of a number of Silicon Valley firms by declaring […]
Know the Safety Nets and Other Protections for Your Money
Bank failures are in the headlines again. Tighter Federal Reserve monetary policy or an approaching recession almost always lead to more bank failures. To avoid being caught in a failure, of course do what you can to avoid a high-risk bank or financial services company. But banks and other financial services firms carry risks that […]
Goldilocks vs. the Fed
A turn in the economy in early 2023 disrupted the plans of many investors and the Federal Reserve. As 2022 ended, investors were poised for inflation to hit the Fed’s 2% target without a recession and for the Fed to shift to an easy money policy by the second half of 2023. But the economy […]
Investors Are Anticipating Goldilocks’ Arrival
The markets are ignoring one of the prime investment rules: Don’t fight the Fed. Federal Reserve officials say they will have to maintain tight monetary policy considerably longer to bring inflation to the 2% target, even after the historically aggressive rate increases of 2022. Markets seem to disagree, while anticipating what some call a soft […]
How Long Will Labor Market, Corporate Earnings Hold Up?
In the next few months, we’ll learn how well household spending and corporate earnings hold up following the most aggressive monetary tightening in 50 years. The Federal Reserve had to tighten monetary policy more in 2022 than it and most investors expected. Higher household wealth and a very tight labor market fueled consumer spending and […]
The Fed Has More Work to Do
What will the Federal Reserve do when infla- tion drops to between 4% and 5%? That’s the key question for the first half of 2023. In 2022, the Fed tightened monetary policy faster than any time since at least 1980. It will tighten more in early 2023, but at a little slower pace than in […]
The Fed Isn’t Finished
Inflation probably peaked for this cycle, but the Federal Reserve still has a lot of work to do. Investors already fooled themselves a couple of times in 2022 by concluding prematurely that the Fed was done tightening monetary policy and soon would adopt a looser one. Investors became enthusiastic again in November after the Consum- […]
