Phil Voelker

The Fed Says Vs. The Fed Does – Just How Restrictive Is Monetary Policy Today?

All Federal Reserve spokespersons refer to the current monetary policy stance as “restrictive”.  Financial conditions suggest otherwise. Today, the Real Federal Funds Rate is 1.85% (nominal rate less CPI).  The Real Rate peaked near 4% in mid-1998 and in late 2006.  Otherwise, the most “restrictive” real rates occurred in the late 1970s through the early […]

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Strategy Update – Shifting The Balanced Between Equities And Fixed Income

Last week, AAMA initiated a shift in its Balanced (or Strategic Balanced) allocation model. The strategy, which previously maintained a 60% allocation to equities, has been rebalanced to a target 50% equity exposure. Why Lower The Equity Exposure Today? Equity valuations have become overvalued over the past few years. The over-valuation rivals those of 1999-2000,

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Where’s The Recession?

Many of the tried-and-true recession indicators are screaming recession. The yield curve has been inverted for 12 months and the money supply (M2) has fallen by 3.7% in the same period. So… where is it? This is perhaps the most widely predicted recession in history. But like we’ve said in previous commentaries, there’s no bullet

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Inflation Update June 2023

Inflation Update – June 2023

The 0.1% monthly and 4.0% annual headline CPI report was certainly nice. It indicated the slowest twelve-month change since inflation became a problem two years ago. HOWEVER… The headline inflation was soothed by a 3.6% monthly drop in the energy complex.  The Core CPI (excluding energy and food) clocked in at 5.2%, the second highest

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Still Stuck Between A Rock And A Hard Place – An Update On The Fed’s Inflation Fight

Two months ago we speculated that the Federal Reserve would continue its inflation fight “until inflation clearly was under control or something broke in the financial system”.  We have witnessed two “breaks” with the failure of Silicon Valley Bank and Signature Bank. The question today is: Do these failures represent THE break, or are they

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Stuck In The Box - A Review Of The Federal Reserve's December Meeting Minutes

Still In The Box – A Review Of The Federal Reserve’s December Meeting Minutes

All eyes have been fixed on the Federal Reserve over the past year, with investors and markets earnestly searching for cues as to where we might be headed – soft landing, crippling economic recession, or something in between. Predicting the severity of the landing may not be practical (for us or the Fed), however, we

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Inflation: The Jury Is Still Out

Inflation: The Jury Is Still Out

When we started writing about inflationary risks in January of 2021, we were on the leading edge… Since then, the markets have become obsessed with inflation reports and with Federal Reserve pronouncements regarding its inflation fight.  Headlines lamenting “historic inflation” and “fast and large rate increases” have dominated news outlets over the last 9 months. 

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