Entering 2023, investors seem to singularly focus on the Fed’s interest rate policy, not the elephant in the room. The media pontificates on whether the Fed should hike by 50bps or 75bps. They continually debate whether they will hold rates around 5% for the remainder of the year or when a pivot might occur. While […]
Looking back at what drove asset prices is a crucial part of the forecasting process for 2023. In hindsight, it’s obvious the Fed’s monetary policy stance and policy expectations were the critical determinants of asset prices. To reduce inflation, the Fed raised the Fed Funds rate by 4.25% and reduced its balance sheet by over […]
You may be thinking, why should I care about bank deposits? There are a couple of reasons, but first, consider that all money is lent into existence. The lending process and, therefore, money creation begins with bank deposits. As bank deposits shrink, as they recently have been, less money is created. As shown below, money […]
Crude oil prices tumbled Thursday as President Biden announced the DOE would release 1 million barrels of crude oil per day for 180 days, totaling 180 million barrels. The intention is to lower gas prices. While releasing more crude oil from strategic reserves may temper inflation, a few factors are worth considering. First, the International […]