There seems to be a disconnect between the Fed’s expectations and those of investors. The Fed appears to continue to expect that the economy will grow at rate above 2% during 2019, which, when viewed in the context of very low unemployment, could lead to an inflation rate above the Fed’s 2% target.
Investors by contrast, are looking at recent weakness in a wide range of asset classes, including the U.S. stock market, commodities, interest-rate futures and corporate bonds. Moreover, the economies of a major portion of the rest of the world appear to be under increasing stress.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA