Published on: November 10th, 2021 • Duration: 62 minutes
The markets seem to have hit a crossroads of inflationary and deflationary signals—now more than ever, it is up to the Federal Reserve to be the guiding hand on the policy that propels the markets into a new cycle. Jurrien Timmer, director of Global Macro at Fidelity Investments, looks back at the era of the Great Depression and World War II, to better understand how the Fed will react to inflation fears. “I do liken the Fed to more like what it was in the 40s. Not that there was a social justice lens then, but just that they were tasked with more than just managing policy to achieve price stability,” explains Timmer. According to the analyst, the Fed and the Treasury are trying to “right the ship” not only economically but also socially. However, some of the Fed measures are creating a tax on bondholders and hurting investors. Timmer and Darius Dale, CEO and founder of 42 Macro, examine the key macro trends and discuss why demographics and the labor market are worrying investors of inflationary tailwinds. The pair break down whether an equities bull market is likely to last and why the “40” in the 60/40 portfolio breakdown likely needs to be amended. Recorded on November 4, 2021.