The Federal Reserve and the bulls have been hoping for a “soft landing” scenario in which inflation falls but the economy doesn’t enter a recession. The odds of a “soft landing” appear to have increased over the past few months - but what are the odds that, should it come to pass, a soft landing will actually last?
Bob Elliott, CIO of Unlimited Funds, and and Andy Constan, founder of Damped Macro Research and 2 Gray Beards, join Forward Guidance to debate the odds. Constan and Elliott, former colleagues at asset management behemoth Bridgewater Associates, also share their views on liquidity, asset valuations, and interest rates.
Twitter exchange between Bob Elliott & Andy Constan that sparked this conversation: https://twitter.com/dampedspring/status/1621896223996125192
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Timestamps:
00:00 Introduction
00:39 What Is The Soft Landing?
04:01 "The Odds Of A Soft Landing Are Very Low”
12:45 January Inflation Data
19:04 How High Can The Fed Hike Rates?
24:50 Outlook for Stocks
29:02 Permissionless Plug
30:10 The Recession Bets Are Being Unwound
36:05 Andy's Short Asset Trade
41:37 Why Are Financial Conditions Loosening?
45:47 Offshore Demand For Treasurys
51:40 Real (Inflation-Adjusted) Interest Rates
01:01:52 Is Inverted Yield Curve A Systemic Drag On Liquidity That May Outlast Temporary Influxes of Liquidity?
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.
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