By , May 22, 2014
Ever since the Fed embarked upon QE measures, people have feared rampant inflation. However, it looks like Ben knew what he was doing, as the economy has successfully been on the mend for several years now, stimulus has been unprecedented, and inflation has remained low.
However, it could be that we are finally on the verge of some inflationary pressure. Capacity utilization rates are back up to 30 year averages. Wage growth is still stagnant, but participation rates have been declining since 2000, and accelerating dramatically after 2010. We are only 3 years into the roughly 18 year period Boomer retirement, so the labor force is shrinking fast and I think we will start to see wages going up soon. There is a “skill gap” that the Millennials just can’t fill. Also, bank lending has accelerated since the beginning from of 2014 from a declining pace seen since the middle of 2012, so that could also lead to an uptick in inflation.
Other posts from
April 24, 2017
April 24, 2017
The start of the year saw a continuation of positive returns in the first quarter as global markets speculated on a spark in world growth initiated by the election of Donald Trump in the United States. Trump’s unique background and style suggested that the new president would be able repair some of the historically wide rift that has separated Republicans and Democrats.
January 12, 2017
During the first quarter, U.S. equities continued the strong advance experienced during the fourth quarter of 2016.
For the three months ending March 31st, the Dow Jones Industrial Average posted a 4.6% gain while the S&P 500 Index rose 5.5%. The stock market has been resilient due to robust corporate earnings as well as employment growth and positive economic data which have undergirded this upward advance.
Equity markets finished 2016 on a high note as markets rallied on a shocking surprise in the U.S. election. The election of Donald Trump for President of the United States was the most recent example of “low probability” events actually occurring and disrupting markets. This happened a few times in 2016, but none so dramatic as the Trump victory.