Jeff Christian, managing partner at the CPM group, calls for a recession by 2024, which will be accompanied by higher metals prices and a strong US dollar. This is the definition of stagflation.
“Supply tends to be less responsive to interest rate changes, so the Fed can try to quell demand and cool inflationary pressure, but it really is beyond the scope of the Fed policy to try to reduce those supply constraints, both in terms of supply production and supply delivery. And those things have been compounded by the Zero Covid policy in China, by the Russian invasion of Ukraine and by a variety of other things too, so you have a lot of supply push, pushing inflation higher and the Fed really doesn’t have a lot of power to control that portion of the economy.”
Jeff Christian, managing partner at the CPM group
This applies to oil as well. See stagflation chart.
Bottom line: I don’t think the market liquidation of growth stocks changes anything. I’m buying (more accurately holding) commodities and other hard assets. The time for growth stocks isn’t now unless you’re prepared to pick survivors and build a stake with a 36-60 month time horizon.
