Jerome Powell May Sound a Bit Less Hawkish on Wednesday; The Demise of Donald Trump
Author: Greg Valliere
November 28, 2022
THE BAD NEWS is that the Fed hasn’t seen signs of a significant slowdown in the still-strong economy, and while inflation may have leveled off, it’s far from the Fed’s target of 2%. Thus we think Powell will make it clear this winter that more rate hikes, perhaps only 25 basis point moves, are likely well into 2023.
JUST BECAUSE THE FED IS MOVING AWAY from 75 basis point hikes doesn’t mean that the rate increases will end anytime soon. The Fed is still hawkish, as Powell will confirm on Wednesday.
BUT THERE ARE TWO MAJOR WILD CARDS that could keep market rates from rising much more: first, the rigid Covid restrictions in China that have ignited rare public dissent — not enough to dissuade Xi Jinping, China’s Dictator for Life, but enough to ignite concern in the West about economic weakness and the slumping price of oil.
SECOND, WE’RE ONLY A WEEK AWAY from key deadlines in the railroad workers negotiations. A strike probably would be brief, but sources close to the talks report there still isn’t agreement on the bitter issue of sick leave.
* * * *
THE DEMISE OF DONALD TRUMP: On the heels of Sarah Palin’s loss last week in Alaska — and the re-election of Trump nemesis Lisa Murkowski — the ex-president faces still another election loss, as Herschel Walker stumbles in Georgia. So the pattern persists: Trump has become an albatross for Republican candidates.
TRUMP EMBARRASSED THE PARTY AGAIN this weekend by dining with a Holocaust denier. Most Republicans were silent, apparently fearful that condemning Trump would alienate the GOP’s hard-core base. But the most important Republican voters — independents and moderates — rejected Trump on Nov. 8 and they essentially are leaving the party.
IT’S IMPOSSIBLE TO EXAGGERATE the mood among Republicans we talked with during the Thanksgiving break. They were aghast that Trump would meet with known anti-Semites — and they want to move on, as Trump indictments loom in the next few weeks.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2023 AGF Management Limited. All rights reserved.