Sigma Signals

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Week of January 16, 2023

Notwithstanding positive developments on inflation from CPI data released last week, comments from varying Federal Reserve Board Governors suggests an unwavering stance towards subduing the inflation beast. In the short term, this can be construed as a negative (although equity prices have largely advanced in 2023 as intermediate term interest rates declined a bit). But on the longer-term basis, it is constructive as unabated inflation hinders capital formation, the mothers milk of investment and productivity. Our Signals remained unchanged this week.

Bob Bilkie, CFA

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