The Fed Will Sacrifice Investors To Beat Inflation

Real VisionMay 20, 2022
A surprise rate cut by the People’s Bank of China boosted equity futures early Friday, and stocks did open higher. But any optimism the Federal Reserve would follow the PBoC’s dovish example and not “hike until it hurts” faded before noon. "They are going to break inflation,” says Jim Bianco, “and if they break you along the way, so be it." The S&P 500 slipped into official “bear market” territory, and the Dow Jones Industrial Average is on track for its eighth consecutive down week, the longest such streak since 1923. Bianco, President of Bianco Research, joins Real Vision’s Ash Bennington to talk about the implications of a hawkish Fed and the possibility of a global recession. And we hear from Dario Perkins about the “tangible” opportunity that may follow this period of slowing growth. Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3wvTE24. Watch the full conversation between Dario Perkins and Raoul Pal here: https://rvtv.io/3wyGYYf.
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Real VisionJune 24, 2022
Stocks Rally To Close a Strong Week
All three major U.S. equity indexes were up more than 2% heading into Friday’s close, even as the University of Michigan’s reading of consumer sentiment hit a record low in June. As its inflation-fighting efforts threaten growth, the Federal Reserve released results of its periodic “stress tests” showing that all subject banks passed. “Bear in mind,” tweeted Jim Bianco, “the Fed does NOT test for a massive policy error leading to soaring interest rates and huge losses. In other words, these tests, created and conducted by the Fed, assume the Fed never makes a mistake.” Bianco, the founder and president of Bianco Research, joins Real Vision’s Maggie Lake to talk about markets, the economy, inflation, and the Federal Reserve. We also hear from Eric Johnston about the market’s perception of the U.S. central bank and its ability to meet its own targets. Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3yirRmq. Watch the full conversation featuring Eric Johnston and Andreas Steno Larsen here: https://rvtv.io/3bpLTT0.
Real VisionJune 24, 2022
This Is the Decade of the Bear
Ignore short-term, headline-driven rallies. According to Eric Johnston, the S&P 500 is headed to the low 3,000s during the next six months. And the Senior Managing Director and Head of Equity Derivatives and Cross Asset at Cantor Fitzgerald says investors must brace for lower equity returns over all time horizons, short-, medium-, and long-term. In conversation with Real Vision’s Andreas Steno Larsen, Johnston argues that the era of accommodative U.S. monetary and fiscal policy is over, with no more easy money for Wall Street from the Federal Reserve or handouts for Main Street from Congress. The narrative around inflation will change quickly because “the Fed is significantly at risk of overshooting.” Johnston makes the case that rapidly slowing inflation will give a boost to bond yields in the medium to long term, and he also advocates for Chinese equities. Recorded on June 17, 2022.
Real VisionJune 23, 2022
It's Time to Talk About Slowing Growth
The Federal Reserve’s commitment to cooling inflation remains “unconditional,” said Jerome Powell in a second day of congressional testimony, even as evidence from overseas indicates we’re heading for a slowdown. “Growth down, inflation expectations down, cracks start to appear in commodity momentum,” tweeted Andreas Steno Larsen. S&P Global’s preliminary Eurozone composite purchasing managers index fell to a 16-month low in June on slower demand growth. “We know that the manufacturing cycle is weakening fast,” Andreas noted, “but the service sector was anticipated to have a strong summer. This is now debatable.” Andreas joins Weston Nakamura to talk about Europe, while Weston provides an update on what’s happening in Asia. More broadly, they talk about whether the narrative focus is changing from “inflation” to “recession.” We also hear from Tian Yang about long-term constraints on commodity supplies. Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3bohJiR. Watch the full conversation featuring Tian Yang here: https://rvtv.io/3xHghji.

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