Friday, March 3, 2023

Economic Update (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

4 comments:

  1. Thanks Marty! Have a great weekend!

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  2. Questions:
    1. What is the Taylor rule?
    2. Why does the Fed use it from time to time?

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    Replies
    1. Thanks Sam! You too!

      "The Taylor Rule" refers to a formula that determines where Fed funds "should be," developed by economist John Taylor... I don't believe that the Fed has ever actually used it, as it generally calls for a higher rate (when necessary) than what sitting Fed officials are comfortable with... I also believe that the "rule" precluded Taylor from ever getting nominated to the Fed board.

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    2. Thanks for explaining Marty.
      I don't like the current set up of US 2Yr/10Yr Spread. It is currently sitting at -90. It is good for the bankers that can lend money to the government on a short term basis and make some great profit. The bond market yield curve is currently so inverted to the point basing on history that a recession is inevitable. I think the equity market will then pull back significantly. If that were to happen, when do you think our base case will bottom out?

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