AFMC - Above The Noise: Stagflation Fears And Election Years
2024-05-27 03:32:00 ET
Summary
- Today’s unemployment and inflation environment is a far cry from what it was in the 1980s' stagflationary years.
- Median stock market volatility in year four of an election cycle is essentially the same as it is in years one and three.
- China has been reducing its exposure to US Treasuries for over a decade without incident to the US Treasury market.
By Brian Levitt, Global Market Strategist
We’re a society that’s prone to hyperbole. No sooner had I grown accustomed to the panic over “hyperinflation” than I was told of the forming “economic hurricanes.” Now it’s stagflation? Hyperinflation and economic hurricanes at the same time? Make it stop!
Instead of immediately exaggerating the situation, let’s instead define what most people probably mean right now by “ stagflation .” The US economy will moderate, as the Federal Reserve (Fed) has wanted, while the inflation rate remains modestly above the Fed’s “comfort zone” (delaying rate cuts by a few months). I’d argue, with respect to Saturday Night Live’s Linda Richman, that today’s stagflation is proving to be neither stag nor flation. Discuss....
Above The Noise: Stagflation Fears And Election Years