The events of this week make a more pronounced v-shape in the downturn. While obviously this will have a very short-term negative impact on us, investors should be focused on the next six-to-nine months. |
The Fed is doing what it has to do, talking a tough line. It still remains to be seen when the upward pressure on wages will trickle up to inflation. Right now, the average American consumer has been untouched, unscathed by the events in Asia. |
The stock market could be on track for a recovery. The stock market is one of the key leading economic indicators and it tends to turn up about six months before the official end of recession. So, if in fact it stays up now, it would be signaling that the recession could be over sometime next June. |
This does imply we'll see higher CPI inflation. The bond yield will move up as long we continue to see greater-than-expected data. |