November Market Note

November 21, 2018


It’s a matter of when rather than if — the Minsky moment is becoming more palpable. The stability caused by a decade of central bank financial suppression has led to the unintended consequence of creating a fragile global financial system — one more vulnerable to shocks. The most likely shock is to be one of central banks’ own collective design.

The relationships amongst markets are often ‘reflexive.’ Right now, the Fed is likely to stay the course and raise rates into 2019 based on domestic economic health— largely fueled by the impact of misguided and temporary fiscal policy — at exactly the same time the rest of the world slows. The feedback from the global slowdown, which has ironically been caused by higher U.S. rates, will bleed back into the U.S. economy by mid-2019.

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