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Central Markets by Robert Lloyd, CFA

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.

  • Writer's pictureRobert Lloyd, CFA

Inflation Series Part 2: Monetary policy is inflationary

Monetary policy refers to whether the Federal Reserve is stimulating or constricting growth and inflation in the broad economy. While its policies are directed at the real economy, they significantly affect the financial economy or markets. This is because interest rates and quantitative easing policies directly affect leveraged or financed positions carried by Wall Street.

While Interest rates are higher than last year, they are still significantly below inflation. Generally, this situation is called "negative" real interest rates and is generally understood in economics to be stimulative. So, even with their rate increases, the Fed is well behind in suppressing inflation. There is a strong political angle to this. The party in power will be blamed for the recession triggered by the Fed's anti-inflation policies, so there is tremendous pressure to NOT trigger a recession.

If you'd like to discuss how to manage through this environment, please reach out to us

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.

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