Issue 40 – Palos’ Last Weekly Macro Commentary of the Year

The Fed Thinks That it Has Unfinished Business: It Is Wrong!

Questions about inflation and growth were the two economic forces that dominated the market in 2022. They had a “grand finale” this week. If there was a week that would be able to shake the Fed and move the bar for investors, it would have been this one. Inflation didn’t look as stubborn as many insisted and growth had a hard time holding on. In fact, the transition to lower inflation and moderate growth was a lot smoother than many antagonists thought possible. It explains why the S&P 500 has wavered for the past few weeks around the 4000 flat line. For no known rational reason, Powell threw a wrench at inflation and seized the wheel of activity by spiking its spokes.


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By Hubert Marleau

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By Hubert Marleau