Will They Or Won't They?

What is the Fed thinking?

Will they or won't they? On the one hand, we have the highest core inflation readings in decades. On the other hand, commodities like lumber have clearly broken as the supply chain gets sorted out. Will the Fed tighten policy?

Inquiring minds want to know. What do you think?

My own view is that the Fed is looking firmly behind, so they will weigh the core inflation reading heavier than the lumber futures data. If that triggers a Fed tightening cycle, we expect the economy to decelerate at the same time the supply chain gets sorted out. That means shortages will quickly become gluts. Wednesday afternoon should be interesting (that’s when Fed Chairman Powell gives his press conference.)

Robert Lloyd, CFA®

Chief Investment Officer

Lloyds Intrepid Wealth Management

Lloyds Intrepid LLC is doing business as Lloyds Intrepid Wealth Management. Lloyds Intrepid LLC offers investment advisory services in the State of Texas where registered and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. Lloyds Intrepid LLC and its advisers do not provide legal, tax or accounting advice. Lloyds Intrepid LLC formulates retirement plans, investment strategies, portfolio construction and investment due diligence for clients with signed investment advisory agreements with us. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed. All opinions and outlooks are subject to change.

140