Here’s my interview with Oliver Renick and TD from yesterday. I brought my sledge hammer with me to demonstrate how Fed policy is currently operating. I also go into detail about the current macro environment and the risks going forward. Specifically:
- This environment is transitioning from an interest rate risk environment to a credit risk environment. This means credit markets could reamin under duress as benchmark interest rates adjust higher and debt gets reassessed at these higher rates.
- This is a credit and housing driven downturn. That means it’s going to be more of a disinflation story in the future and a longer drawn out economic event.
- The Fed can’t pivot at this point because they’ve already turned over the ball. I think they’re way behind the curve on inflation and this story will become more and more of a disinflation story as we head into 2023.
- This isn’t quite 2008 and it isn’t quite 2002. But it definitely isn’t 1978 in my view. That means it’s going to be a tough road to hoe. Patience and discipline are going to be essential for navigating this tough environment.
I hope you enjoy the interview.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.