QQEW - No One Knows: Searching For Clues - Weekly Blog # 891

2025-06-03 06:20:00 ET

Summary

• The Fed is very concerned about inflation expectations. Part of the reason for the Fed Reserve Board’s current cautious attitude in terms of interest rate changes is a period of potential stagflation, which would be difficult for the Board to manage.
• Though recessions are not identical, they are similar in many cases and can be roughly divided between climate and man-made. Man-made events are largely caused by excessive debts and insufficient reserves, which can be broken down into two categories - cyclical price problems, and the less frequent and more serious structural problems.
• Position changes should be a little at a time. Exposure to winners that have become very large should be tailored.

Judging by the frequency of changes emerging from 1600 Pennsylvania Avenue, Mar Lago, and Bedminster NJ, even Mr. Trump doesn’t know what will happen. Furthermore, one gets the feeling that what he wants appears to change over time. While he can wait a bit, people with portfolio responsibilities often cannot. In addition to many of the same concerns facing the President, we must deal with the impact of the unknowns on our clients and on our own fears....

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