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Editor's Note: Below is the introduction to Sunday's edition of "Weekend Reading." In addition to the section below, each edition of "Weekend Reading" includes several complimentary investing insights, on the house, to help investors prepare themselves for the days, weeks, and months ahead. |
Dear Investor,
Markets have been getting “high” off the Fed’s copious supply for over a decade.
Investors have become justifiably (complacently?) accustomed to unanimity amongst our uber-dovish FOMC members committed to delivering easy money. That said, divergences inside the FOMC are widening … when to taper, if they should taper, how much they should taper, etc.
Case in point: a rogue Eric Rosengren (Boston Fed President) recently stirred up financial news headlines as he turned the spotlight onto himself and warned of a taper this fall. The odds of a major screw up are bubbling to the surface.
On that lovely note, the Fed’s annual Jackson Hole Economic Symposium starts this Thursday, August 26th. Is the next episode of “Fed Folly” upon us?
This annual pow-wow of global central market planners has, in years past, served as an opportunity for Fed chairs to “think big.” (God help us all). Our omnipotent, unelected policymakers get a chance to expound on their current policy outlook and… shock financial markets!
Something important to consider from Hedgeye CEO Keith McCullough:
“As the short end rises, the market gets scared that the Fed is going to F up. ‘Oh, they’re tightening into a slowdown!’ That’s because they are.
The Fed is late to the party on inflation, and they’ll be tightening into a real growth slow down (leading the long-end of the curve lower).”
To prepare you for any potential market upheaval, we invited three leading investment strategists for a special Real Conversations series: Fed Policy Mistake? Market Risk Rising on HedgeyeTV. Each guest is also an astute Fed watcher—whether they’d like to admit it or not.
The festivities kick off this Thursday, August 26th (same day as Jackson Hole meeting’s start). Each guest will join Keith in a one-on-one LIVE discussion.
The lineup includes:
Danielle DiMartino Booth (CEO & Chief Strategist at Quill Intelligence):
“I think they’re the reason that the market decided to interpret them in a negative light is that there is a lot of disagreement among members among Federal Reserve officials more than I think we’ve seen in a generation.”
Jim Rickards (New York Times Bestselling Author and Renowned Investor)
“What are the 3 ways out of excessive debt to GDP? 1) Growth. But debt is a headwind to growth. 2) Default. We’re not going to default. 3) The only way out is inflation."
Daniel Lacalle (Chief Economist at Tressis SV)
“With the Federal Reserve purchasing $40 billion of mortgage-backed securities (MBS) and $80 billion in Treasuries every month, and the deficit expected to run above $2 trillion, one thing is clear: The diminishing effect of the stimulus is not just staggering, the increasingly short impact of these programs is alarming.”
They'll discuss portfolio positioning, market dynamics, and actionable investment ideas based on what the Fed says and does at Jackson Hole.
You don’t want to miss this.
We invite you to join us and take your investing game up a notch in our special webcast series, Fed Policy Mistake? Market Risk Rising.
“The entire Hedgeye Process is designed to front-run the Fed. The Growth, Inflation & Policy model; the G and the I front run the P – the policymakers. That’s what we’re doing.” – Keith McCullough
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