New interview now available⦠[Read this article on our website.]( [Global Macro Update]  Sept 16, 2022 Global Macro Update - The Fed's Political Failure Dear Reader, Welcome to Global Macro Update for Friday, September 16, 2022. This week I spoke with Dr. Lacy Hunt, executive vice president of Hoisington Investment Management Company. It was a fantastic conversation, and we covered a variety of timely topics. We discussed Fed rate hikes, the US debt load, household savings, bond investing for the short and long term, and more. The video of my full conversation with Lacy is below. Read on for more⦠Saving into Oblivion As Lacy and I discuss in this weekâs interview, the average American household is under a financial pressure today that most families have never seen. According to this morningâs Wall Street Journal, the average 30-year mortgage rate has jumped beyond 6% for the first time since 2008. Inflation, while moderating, continues to erode purchasing power. And household savings rates, critically, are headed in the wrong direction after dramatic spikes during the worst of the COVID crisis. The chart below, from the St. Louis Fed, tells the story: Prior to COVID, savings rates generally sat between 6.5% and 8%. Today theyâre clinging to 5% and trending lower. The Fed may be making headway on the inflation front, but their âtoo little, too lateâ response is putting enormous pressure on American families. Whatâs the political and policy risk? Do we face the dreaded âhard landingâ and possible recession after all? Dr. Lacy Hunt and I discuss that in depth below. But first⦠A Quick Look at the Markets This Past Week⦠As of writing... Gold was down 2.8% to $1,668. The average 30-year mortgage rate rose 2.2% to 6.02%. Yields on 10-year Treasuries increased 3% to 3.42%. The S&P 500 decreased 5.4% to 3,848. Bitcoin was down 7.5% at $19,766. Oil remained relatively flat at $86.18 / barrel for WTI. And now⦠This Weekâs Global Macro Update Interview⦠Dr. Lacy Hunt, executive vice president of Hoisington Investment Management Company and perennial Strategic Investment Conference (SIC) favorite sat for this weekâs Global Macro Update interview. [Click here]( or on the screenshot below to watch nowâ¦
Click the Image Above to Watch Global Macro Update Now In this edition, youâll hear Lacy and me discuss: - How the Fedâs slow shift from âlender of last resortâ to âspender of first resortâ could have far-reaching consequences for the economy⦠- Why the Fedâs greatest policy obligation moving forward should favor modest- and moderate-income households⦠- What increased housing prices mean for the cost of living in other areas of the economy⦠- Why, despite economic resilience, there is still a significant risk of a hard landing⦠- How soaring interest rates are negatively affecting household savings⦠- Why the Fedâs long-term credibility may be severely damaged⦠[Click here to watch now.]( Finally this week, weâd like to remind you that you can use the âClick here to update email preferencesâ link below to manage your subscriptions. Thank you for reading Global Macro Update . Sincerely, Ed DâAgostino
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