No. of Recommendations: 14
My hidden agenda is to just get y'all thinking about fixed income as a viable alternative (not in terms of returns but in terms of intangibles) to stocks. This is a recent development for most of us, after the long "Greenspan put" era from 1995 to 2021.
Speaking of which, current high nominal yields might not last.
(some real yields are up, others are down, that's a different story)
Inflation is something worth considering, and unfortunately something you almost HAVE to make a guess about, despite being pretty unpredictable.
I keep an eye on Divisia M4 as the best measure of the broad US money supply.
It is generally a good leading indicator of where inflation is headed.
(particularly during stretches that interest rates aren't zero across the whole term spectrum causing the underlying math to get messy)
Its year-on-year rate of growth cracked 20% by April 2020, well before the inflation impulse hit around 2021-Q2, so that was a good warning shot.
Anyway, I mention it because the year-on-year change in Divisia M4 is now down to -2.465%.
One might speculate that a drop in inflation is coming, perhaps even a drop in core inflation which has been stickier, still at 5.3% year-on-year.
Jim
