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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

Now we know why growth peaked in 1Q2021

Why did the sentiment indicators peak in the 1st Quarter? Now we know.

A few weeks ago, I asked the question what happened in the first quarter to turn all the growth metrics down (original post link in comments section). Now we know the answer, thanks to Barry Bannister at Stifel.

Global money supply growth peaked and began to move down. Ignore for a minute the inflation headlines. Global money supply changes directly affect markets and indirectly affect real economies. So the headline inflation we see in our data is strongly affected by pandemic supply disruptions and indirectly affected by changes in money supply.

You can see a coincidental peak in growth sentiment and money supply growth in the 1st quarter. Btw, money supply growth is only going to decline over the next year if the Fed reduces QE and raises interest rates (gulp!). You can guess what may happen.

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.

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