REPLAY | DE | Quarterly | GDP Conference Call | How Strong? How Long? The Q2 Economy, Inflation, Fed and Markets – 7/29/21

Posted July 29, 2021 by Diane Buscemi

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How Strong? How Long? The Q2 Economy, Inflation, Fed and Markets

— Q2 Real GDP (1st Report; Adv.)
• Boomlet and/or Boom?
• Strengths, Weaknesses
• Why So Strong?
• How Long Strong? And Why?
— DE “Basic Prospect” (75% Odds): Strongest Economy in Decades
• Growth, Inflation and Unemployment (Labor Market)
• Where in the Business Cycle Are We?
NBER and DE Stages
• Fundamentals—Factors Underlying the Consumer, Nonfinancial Business, Bank and Nonbank Financial Institutions, Trade and the Government Sector
• “Mood of America”
— Risks—COVID Variants; Fizzling-Out; Inflation Acceleration; Boom and Overheating; External Shocks
— Fed Meeting and Prospects Going Forward—The Fed “Plan”?
• DE Fed Scenario
• A New Fed Paradigm—”Dual Objective” Still But Emphasis on Unemployment and Employment; Now Allowing Higher Inflation Longer with Inflation Expectations Replacing “Phillips Curve” Paradigm
— Fiscal Stimulus and the Washington-Centric Policy Shift—Little Parallel with History
— Financial Markets Perspectives—Stunning Earnings the Big Story
• Bull Equity Market Intact—Fair Value and Ranges
• Interest Rate Trend Likely Higher
— Asset Allocations—Strongly Overweight Equities; Underweight Fixed Income and Cash & Equivalent; Overweight Private Equity and Venture Capital