 | Amanda Heckman
Editorial Director |
The Federal Reserve came out swinging against inflation this week. Gone is the timidness and the talk of gentle 25-basis-point hikes. The Fed is now taking a tougher stance, insisting that the only way to get a handle on the biggest inflation spike we've seen in decades... is to go BIG. But talk is cheap (and inflation is not). In other words... we'll believe it when we see it. [Click Here to Get Marc Lichtenfeld's Top 5 Dividend Stocks (FREE PICKS)] Nasty and UglyIf you'll recall, the Fed took a cautious stance with its rate hike in March. Citing concerns over Ukraine, it inched rates just slightly higher so as not to spook anyone. But with predictions that the March inflation numbers (which come out next week) will be "nasty" and "ugly"... The Fed's feeling the pressure more than ever. St. Louis Fed President James Bullard did some damage control this week. In a speech on Thursday, he tried to convince folks that things aren't as bad as they seem. He said the Fed needs to raise rates substantially to control inflation... and that, really, they aren't as far behind the curve as it seems. Sure. Given the huge misstep they made by insisting for months that inflation was "transitory"... we'd say they're so far behind the curve they can't even see it. After all, Bullard is now calling for 100-basis-point hikes by June, which - according to our calendar, anyway - is less than two months away. That's some big talk for being just "a little behind the curve." Joining the chorus, Fed Governor Lael Brainard also tried to reassure folks on Tuesday that her team was dealing with the inflation mess (that, ahem, they created). "It is of paramount importance to get inflation down," Brainard said. Then she added this head-scratcher: The committee is prepared to take stronger action if indicators of inflation and inflation expectations indicate that such action is warranted. | | |
If? With inflation raging at 40-year highs, we'd say we left uncertainty in the dust a long time ago. Go BIGThat's why the only solution is for the Fed to go big... to pull a page from former Fed Chair Paul Volcker's book. It's time for the next "Saturday Night Special." As Andy recently explained... On the evening of October 6, 1979, [Volcker] unholstered his "Saturday Night Special." It was a series of big, swift moves. It changed the way the Federal Reserve fought inflation. Gone were the timid, step-by-step moves his predecessors had failingly used in an attempt to tame market volatility and runaway prices... Volcker knew he was creating a recession - and a nasty one at that - but he was convinced his recession would be less lethal than what would come if his Fed did nothing. | | |
The Fed's done some serious damage with its timid approach to correcting the course we're speeding down. They took big, bold moves to rescue the economy in March 2020 (and in 2009 before that) with near-zero interest rates and endless money printing. It's going to take moves just as big to clean up the mess all the rescuing has left behind. Enough with the talk. It's past time to take action. The market has just closed the books on the worst quarter since 2020, when fears of a growing pandemic tanked stocks. But with COVID-19 in the rearview mirror (for now), can investors breathe easier? With this week's Stock of the Week, they can... literally. Click here or on the image below to watch the video. It's the fastest an American startup has ever reached a billion-dollar valuation. From zero to unicorn in one month. And the business model is simple. It's something many folks have dreamed of. The company buys homes - typically very nice homes in very nice locations - and sells them to multiple investors. The trend isn't all that new. But new technology is driving it to levels we've never seen before. Continue reading to see the opportunity for investors... "We're in a hell of a mess in every direction." - The Late Fed Chair Paul Volcker, in one of his final interviews Want more content like this? | | | |
Amanda Heckman | Editorial DirectorAmanda Heckman is the editorial director of Manward Press. With unrivaled meticulousness, she has spent the past dozen or so years sharpening Andy's already razorlike wit... and has worked with numerous bestselling authors and award-winning financial gurus along the way. | | |
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