December 16, 2022

The recent Jay Powell press conference is a ray of sunshine during an otherwise gloomy time. His resolve points to a decline in the inflation rate in the near future. We agree with such a consensus view. Where we part company is the assumption that the Fed could cause a recession. We just point to the current quarter. Since the Fed began its new battle against inflation, the inflation rate appears to have peaked. Contrary to the naysayers, after contracting during the first half of 2022, the economy has picked up during the second half of the year. The market has responded quite favorably to the declining inflation and positive economic growth. If the Fed continues on the current path, we do not see a recession on the horizon, and we see further decline in the inflation rate. Our outlook seems to be more bullish than the consensus.

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