Just Politics

[jbsliverer]

That is what we have been led to believe. But in the article I referenced, the author is arguing that it is nothing but "The Great Inflation Lie: The Fed Won't Stop Inflation" and that "both Government and the Fed want inflation to run very high". Then he goes into why but also stated where the few comparisons to now was a time with high inflation and low Treasury rates being very beneficial to equity holders. His view also was that;
"The Fed cannot and will not hike rates anytime soon. And if they do, it will be an immaterial rate hike that will have an insignificant impact on inflation.
The government will continue to ensure there is a high amount of liquidity in the financial system. The Bubble of Liquidity will remain large."

In his conclusion he states;
Don't be fooled by Fed Chair Powell's hawkish talk. After all, he has a hearing to keep his job coming up in January. Treasury yields are NOT pointing to a recession and/or deflation. They are telling us that liquidity will remain high and that the treasury market is not buying the hawkish story the Fed is selling.

We are seeing dynamics that the stock market has not witnessed for over 70 years. The inflation rate will remain above the 10-year Treasury rate for a sustained period of time, creating an environment of high inflation and relatively low-interest rates. Historically, this dynamic has been very beneficial for equity markets!

Right now, it is a fantastic time to be an investor and the worst time to be sitting on cash. Investors want to be exposed to equities that benefit from high inflation, while also benefiting from low treasury yields.


Now weather or not he is wrong or right in his theories, I'm not qualified enough to answer definitively, but he does have some points to ponder and back up his conclusions. Is it all noise and just him trying to sell his wares, you decide.