In mid-January in Why You Shouldn’t Expect A Return To 2% Inflation we explained some of the persistent upward pressures on inflation. Since then ten year inflation expectations derived from the treasury bond market have increased by 0.5%. Russia’s invasion of Ukraine is a big factor, but nonetheless a half point increase over the next […]
Most US energy investors are familiar with Cheniere, America’s leading exporter of Liquified Natural Gas (LNG). Founded in 1996, the company was originally dedicated to increasing domestic supply, first as an oil & gas exploration business and then as an LNG importing company, which looked unlikely to keep up with growing demand. The Shale Revolution […]
It must have been a lively FOMC meeting last week. The Fed has obviously committed their biggest mistake in living memory, and they finally started to normalize short term rates. They’re a year late, to the evident frustration of James Bullard who dissented on the 0.25% increase because he preferred 0.50%. The FOMC revised up […]
Investors have endured several body blows this year. Inflation was already rising due to the strong rebound from Covid exacerbated by last year’s $1.9TN Covid relief spending. The long heralded and late removal of excessive monetary accommodation is about to start. More recently, Russia’s invasion of Ukraine has abruptly upended decades of western engagement, ushering […]
Next week the Fed Funds rate is expected to be raised, for the first time in over three years. Pundits love to say the Federal Reserve is “in a corner”, implying a Hobson’s Choice between possible courses of action. This hackneyed term is being deployed again, mischaracterizing their choices. It’s true inflation expectations have edged […]
Last week the US Energy Information Administration (EIA) published their 2022 Annual Energy Outlook. Solar and wind output are expected to grow at 4% pa, reaching 12% of our total energy production by 2050, triple their share today. This is an impressive growth rate, although less than the media coverage of renewables would suggest. It’s […]
Had Jay Powell and the FOMC prudently begun reducing the economy’s degree of monetary support a year ago when the Covid vaccine was already being administered, they’d have more flexibility to manage the economy’s current challenges. From a 2% neutral rate and with the balance sheet shrinking, they’d be able to pivot towards easing or […]
Who can’t be moved by the pictures of women being trained to fire automatic weapons, and crates of Molotov cocktails being prepared in backyards. The Ukrainian people are drawing the world’s admiration and financial markets’ attention. There are numerous possible paths for the war to follow, and each one brings its own set of investment […]
Maslow’s Hierarchy of Needs is a stylized pyramid with food and shelter at the base and self-actualization at the top. Maslow wasn’t around to contemplate where ESG (Environmental, Social and Governance) aspirations sit on his pyramid, but he would likely have placed them near the summit. The people and institutions most sensitive to ESG have […]
Last week JPMorgan forecast that the Fed will raise rates at their next nine meetings, resulting in a 2.25% hike in short term rates by March 2023. They warned that inflation is entering a “feedback loop”, whereby higher wages demanded by workers to compensate for eroding purchasing power feed back into higher prices. Over the […]
