WealthTrack

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A NOTED FED WATCHER SAYS THIS FED HAS THE COURAGE TO DEFEAT INFLATION DESPITE RECESSION RISK

We are in a new era of higher inflation and the pressure is on the Fed! Inflation is running at 40-year highs and it’s coming from every angle: food, energy, services, goods, rents, and wages which are all increasing.  

Is the Fed up to the challenge? Can it rein in inflation without causing a recession? What can we expect as borrowers and investors?

We have lots of questions to ask this week’s guest but we know from his past performance he can take them all in stride. 

Paul McCulley is currently an adjunct professor at Georgetown Business School where he teaches a very timely multi-disciplinary course combining law, economics, monetary policy, global finance and behavioral finance.  

McCulley says this Fed has the courage to defeat inflation despite recession risk.

WEALTHTRACK Episode #1842 broadcast on April 15, 2022

Listen to the audio-only version here:

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PAUL McCULLEY 

  • Financial Thought Leader
  • Former Chief Economist, PIMCO
  • Adjunct Professor, Georgetown University McDonough School of Business

ACTION POINT

DON’T FIGHT THE FED!

  • Major turning point in monetary policy
  • Shifting from a decade of historic easing of credit conditions to potentially aggressive tightening
  • Beneficiaries of easy credit, record low-interest rates, low inflation, and massive liquidity are under pressure. Includes investment winners of the last decade: 
    • Growth stocks
    • Speculative companies
    • Initial public offerings
    • Venture capital and private equity
    • High yield and longer maturity bonds that are more sensitive to changes in interest rates
  • Beneficiaries of tightening Fed policy: 
    • High-quality companies, generating dependable profits and cash flow, paying dividends and buying back stock 

ONE INVESTMENT

GLOBAL EXPOSURES

  • Diversify your portfolio internationally 
  • Own some emerging market stocks 

ARCHIVES

Paul McCulley from the WEALTHTRACK Archives:

WEB EXTRA

GEOPOLITICS MATTER

When Paul McCulley was Chief Economist, Fed watcher, and head of the $400 billion short-term trading desk at PIMCO he paid some attention to geopolitics, but he says understanding the state of the world is much more important today.