After a breathtaking run, the market just flashed a rare signal that has an impressive track record of predicting a big move in the stock market over the coming 12 months.
There is no doubt the economy is slowing by a noticeable amount. At the same time, inflation is holding steady above the Fed’s target. That's the definition of stagflation, even though its nothing like what was experienced in the 1970’s.
That night in August 1971, the rules of money changed. Since then, debt has exploded, inflation has become a constant, and central banks have gained the power to create money without restraint.
François de Soyres, Ana Maria Santacreu, and Ethan Hunt from the St. Louis Fed offer some quantitative evidence based on international royalty payments.
The great-and-the-good of the American central banking world are off to the Fed’s annual Jackson Hole conference. And for Chair Jerome Powell, his appearance could hardly come at a more challenging moment.
July’s inflation data delivered an upside surprise and amplified concerns surrounding price pressures and complicating the Federal Reserve’s September rate decision.
