Posted on 05/25/2022 12:33:02 AM PDT by RomanSoldier19
Time to dig out those bell-bottoms and eight-track tapes. Wall Street may be headed for a second season of “That ’70s Show.”
Not that today’s millennial investors know what those items are of course.
A pair of high-profile financial commentators went on record this week saying investors may need to study the playbook for the 1970s if they want to make money in the 2020s.
Mohamed El-Erian, president of Queens’ College at Cambridge and chief economic adviser at Allianz, warned of a ’70s-style “stagflation” in a Bloomberg interview this week, blaming the Federal Reserve’s view in 2021 that inflation would at some point fade. He noted that Fed Chair Jerome Powell has since retired the “transitory” thesis and that Powell now says he will tighten monetary policy until he sees “clear and convincing” evidence that inflation is in retreat.
“The Fed is finally catching up to developments on the ground,” El-Erian said, adding that stagflation is the “worst thing for central banks, especially for the Fed, because it puts its two objectives in conflict with each other.” Those two Fed objectives are low unemployment and stable prices.
Meanwhile, financial historian Niall Ferguson told a crowd at a Pictet Asset Management gathering this week that the recent pattern of geopolitical and economic events clearly resembles that of the 1970s and will likely lead to similarly poor stock and bond returns. Ferguson cited the current Ukraine war and Russian oil embargo as reminiscent of the Arab-Israeli conflict of 1973, which led to a spike in gas prices.
(Excerpt) Read more at investmentnews.com ...
Let’s go Brandon!
I was in my early teens when stagflation came out. I can guarantee the sequel is gonna suck, too. While dems try to solve the problem they themselves caused.
CC
I wonder if interest rates would rise enough to make CD’s worth looking at.
Seems like when I was a kid in late 70’s/early 80’s I remember my grandfather bragging about interest he was earning on cd’s at a local savings & loan.
When you can get 5% for cash, do it.
I think some of those CD rates were in the teens ...
Jimmy Carter flashback.
I guess every generation needs to be educated.
Time to start bussing kids across town for no good reason 🤪
Some repeatedly, sadly.
I bought my 1st house with a 12% mortgage rate in 1980. There was a rush to buy houses at that time due to Jimmy Carter’s incompetence. We are headed to the same place again, nut with higher housing prices.
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