Lynch: “Is the Fed even driving the bus?”

May 31, 2024

After many rate hikes and keeping rates high in the hopes that inflation will come down, the Fed seems stuck on what it can do to reduce inflation to its 2% target. “Is the Fed even driving the bus,” said Eric Lynch, managing director at Scharf Investments during a recent appearance on Reuters TV. The Fed seems to believe that it can control inflation with monetary policy, but “monetary policy doesn’t control all inflationary pressures.” With headwinds such as trade wars, fiscal debt/deficits, and global conflicts, we don’t believe that the Fed can rely on monetary policy alone. Eric also shared his take on what’s moving markets lower and the downside to having such a large concentration in tech.

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