What You Can Do to Protect Your Investments


What You Can Do to Protect Your Investments

Weekly Market Outlook
By Keith Schneider and Donn Goodman

Jackson Hole, Wyoming is a beautiful sun-drenched city in the Summer, and cold (but great skiing) in the Winter.

August offers low humidity with warm pleasant mountain weather during the day, then comfortably cooler nights.

It reminds me of another high-altitude city called Santa Fe where one of our offices resides.  Both cities have great weather this time of year.

They are very livable smaller cities, but both are getting expensive to live in.  However, that is happening everywhere in the US.  And that is big part of the inflation story that the Fed is wrestling with.

Inflation was the focus of the Fed’s annual Jackson Hole Economic Policy Symposium that took place this past week.

Leaders from all around the world attend to participate in group discussions, and listen to the Fed’s latest research and prognostications.

Attendees include CEO’s from various industries, portfolio managers from the largest investment firms, family offices, and hedge funds.

Economic reporters, well respected leaders and analysts, current and past Fed governors, and TV commentators all provide play by play analysis of the whole event.

The reporting centers around the economic outlook, interest rates, employment, social issues, federal and consumer debt, and everything in between.

Surprisingly, many participants were more hawkish than had been expected.

One of the most outspoken Governors was James Bullard from the St. Louis Fed.

He has been very hawkish for quite some time.  He believes that inflation is out of control and needs to be addressed NOW.  He’s adamantly, suggesting that the Fed Committee front end load rate hikes (raise rates quickly and higher than expectations) to fight inflation.

The market shook many of these comments off during the weeks leading up to this week’s speech.

But had they become relaxed?

Jerome Powell, the current Fed Reserve Chairman, addressed the crowd Friday morning.

The title of this year’s speech was “Reassessing Constraints on the Economy and Policy,” an economic policy symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming

This speech is so important because it provides a roadmap for what course of action, if any, it may take in the near future.

We have lived in a long period of loose monetary policy, with inflation well under control (2.0%), we saw rates at the lowest they had ever been historically. But coming out of the pandemic, several rescue monetary giveaways, global supply issues and a hostile incursion in Ukraine, things have changed rather dramatically.  Inflation is the number ONE problem these days around the world.

The Fed’s discussion of its stance on inflation is reason (among others) that most active traders and investors, along with financial firms of all size and stature were focused on the Jackson Hole Symposium this week.

Also, since the symposium is held late in the summer, trading volume is low leading up to the speech.  It can explode positively or negatively, shortly thereafter, if anything of importance is discussed.

Such was the case this past Friday.

Click here to read more about Chairman Powell’s opinion on the “pain” that most Americans have to feel before things get betterAdditionally, we report on the latest inflation data, corporate earnings, and the 8 things you can do to protect your investments. 

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