The economy, markets and our collective COVID-19 mindset are at an important inflection point.
- The economy, markets and our collective COVID-19 mindset are at an important inflection point.
- During congressional testimony, Chairman of the Federal Reserve Jerome Powell reinforced that the Fed would not raise its benchmark federal funds rate from nearly zero until certain objectives are met.
- Given that we are in uncharted territory, markets will navigate data releases, earnings, employment conditions and policy statements ever more diligently.
During his semiannual congressional testimony in late February, Chairman of the Federal Reserve Jerome Powell sought to assuage market fears that the Fed would seek to alter its message of allowing inflation to run “hotter” in order to ensure its broadened maximum employment mandate. With a raft of economic data pointing to a more robust economy, prospects for stronger earnings, the pace of the vaccine rollout working through logistical problems, along with the addition of a third vaccine, and a fiscal relief package working its way through Congress, many market experts—not to mention the equity and Treasury markets—are questioning the Fed’s timeline.
Moreover, a headline-worthy debate has been intensifying as to whether the combination of fiscal and monetary largesse is fueling not just a stronger economic backdrop, but inflationary pressures as well.
Regardless of the side taken in the debate, it has become increasingly clear that the economy, markets and our collective COVID-19 mindset are at an important inflection point.
Read Quincy Krosby’s full March 2021 market commentary, "The Inflation Wars."
References include the following: Bank of America, Barron’s, Bespoke Investment Group, Bloomberg, CNBC, CNN, Cornerstone Macro Research, The Economist, Evercore ISI, The Financial Times, Goldman Sachs, Morgan Stanley, The New York Times, Politico, Real Money – TheStreet, Renaissance Macro, UBS and The Wall Street Journal.
The views and opinions are those of the author at the time of publication and are subject to change at any time due to market or economic conditions. This document has been prepared solely for informational purposes. This is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The Prudential Insurance Company of America, Newark, NJ, and its affiliates. Prudential and its distributors and representatives do not provide tax, accounting, or legal advice. Please consult your own attorney or accountant. In providing these materials, the issuing companies and distributor listed above are not acting as your fiduciary as defined by any applicable laws and regulations.
© 2021 Prudential Financial, Inc. and its related entities. Prudential Annuities, Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.