IN NOVEMBER, "MORNINGS WITH
MARIA" IS LIVE RIGHT NOW.
.
AND INFLATION, OF COURSE, IN
FOCUS TOMORROW THE FEDERAL
RESERVE BEGINS THE FIRST
TWO-DAY MEETING OF THE YEAR,
THERE IS A FIRST FED MEETING
OF 2022.
WE ARE ANTICIPATING AT LEAST
FOR RATE HIKES THIS YEAR
GOLDMAN SACHS OUT IN OUR
SAYING INFLATION WILL CAUSE
MORE THAN FOUR RATE HIKES
THERE IS ALSO A DEBATE
UNDERWAY ABOUT HOW MARKETS
WILL REACT AND WHETHER OR NOT
MARKETS DISRUPTION WILL STOP
THE FED IN ITS TRACKS, FROM
RAISING RATES, JOINING ME
RIGHT NOW CORNERSTONE MACRO
COFOUNDER PARTNER NANCY LAZAR
ALSO JOINING ALL MORNING LONG
DAGEN MCDOWELL MICHAEL LEE
NANCY GREAT TO SEE YOU THANK
VERY MUCH FOR BEING HERE I
WANT KOUR YOUR TAKE WHAT IS
BEHIND MAJOR SELL-OFF OF NEW
YEAR WHAT DO YOU THINK?
>> WELL, I’M BEEN OPTIMISTIC
ON U.S. PAST YEARS THREE MAJOR
HEAD WINDS TO GLOBAL GROWTH IN
UNITED STATES EVERYONE TALKING
ABOUT FED ABSOLUTELY WHAT FED
DOES IS IMPORTANT BUT WE
ALREADY HAVE BEEN IN A GLOBAL
HIKING CYCLE FOR A YEAR 95
GLOBAL CENTRAL BANK
TIGHTENING, MAINLY LED, MY
POINT THAT IS ALREADY GOING TO
BE RESTRAINT AN GLOBAL GROWTH
IN 2022 NOW THE FED, RISKS
OBVIOUSLY, ADDING TO THAT
FURTHER INCREASING ODDS WE SEE
A SLOWDOWN NOT ONLY THIS YEAR
BUT POTENTIALLY INTO 2023 SO I
THINK ONE OF THE REASONS,
ACTING NEGATIVELY TO FED NOT
JUST FED IS GOING TO MOVE IT
IS ON TOP OF WHAT IS ALREADY,
BEEN A VERY, VERY CLEAR GOAL
TIGHTENING CYCLE SECOND OIL
ALREADY HEADWIND ON GLOBAL
GROWTH IN 2022 NOT SO MUCH TO
UNITED STATES FOR OBVIOUS
REASONS BUT TO EUROPE, SOME
OTHER, ECONOMIES IF WE SEE
PRICES HIGHER BECAUSE OF PUTIN
AT THE END OF THE DAY OF DAY
WILL AGGRAVATE THE GLOBAL
SLOWDOWN WE ALREADY SEE IN THE
CARDS, THEN THIRD IT IS
BECOMING VERY, VERY CLEAR BY
COMPANY ANNOUNCEMENTS, THAT
THIS YOU KNOW STAY-AT-HOME
SPENDING TRADE IS OVER, YOU
HAVE EXCESSIVE INVENTORY, YOU
RISK SEEING PRODUCTION CUTS,
GOING TO THEREFOR SEE WEAKER
EARNINGS, SO VERY, VERY
DIFFERENT BACKDROP, THAN WHAT
I HAVE SEEN THE PAST COUPLE
YEARS, FUNDAMENTALLY I THINK
UNITED STATES, STRONGEST
ECONOMY IN THE WORLD BUT THE
END OF THE DAY SIGNIFICANT
GLOBAL SLOWDOWN RISK OF GLOBAL
RECESSION IF YOU SEE --
INCREASE OR FURTHER IF FED
DOES GET TOO AGGRESSIVE I
WOULD AGREE I DON’T THINK FED
CAN GET TOO AGGRESSIVE GIVEN
THE GLOBAL BACKDROP.
>> GREAT ANALYSIS, NANCY AS
ALSO A, I’VE GOT ONE OF YOUR
REPORTS IN FRONT OF ME BACK
FROM JANUARY 17, WHERE YOU SAY
FED AND OIL RISK CREATING A
2023 GLOBAL RECESSION.
WHERE ARE YOU ON THE RATE
HIKES BECAUSE CEO OF LINDSEY
GROUP LARRY LINDSEY WITH ME
LAST WEEK BASICALLY SAID SURE
THE FED WANTS TO RAISE RATES
FOUR TIMES, BUT WILL IT BE
ABLE TO, GIVEN THE MARKETS
DISRUPTION HERE IS LARRY
LINDSEY FROM LAST WEEK WATCH
THIS GOT TO GET REACTION.
>> I THINK FED GOING TO
PROBABLY INCREASE RATES FOUR
TIMES THIS YEAR STARTING IN
MARCH.
IT WILL BE INTERESTING, TO SEE
IF THEY START THEIR
QUANTITATIVE TIGHTENING SELL
OFF ASSETS, BUT THE MARKET IS
GOING TO REACT STRONGLY AT
SOME POINT.
AND I DON’T THINK THE FED WILL
ONCE THAT HAPPENS, CONTINUE TO
PUSH FORWARD I THINK THEY WILL
TAKE A PAUSE.
.
>> 20% DROP SOMETHING LIKE
THAT I THINK THE FED WILL
PAUSE.
MARIA: WHAT DO YOU THINK
NANCY?
IS THE MARKETS READY FOR WHAT
IS COMING AT THEM?
WILL THEY BE SO DISRUPTIVE
FEDERAL RESERVE WILL HAVE TO
STOP IN MIL OF PLAN RAISING
RATES.
-- I DON’T NECESSARILY BELIEVE
FOUR TIMES MAYBE THREE,
INFLATION IF RIGHT FED DOESN’T
NEED TO GO FOUR TIMES I THINK
INFLATION GOING TO SLOW
SIGNIFICANTLY BECAUSE OF
CONSUMER SIDE LOOK WITH A
LULULEMON DOING DISCOUNTING
MORE PRODUCTS WE THINK
CONSUMER CASE GOING TO BE
DEFLATION, TO BE SURE ALREADY
GETTING FINANCIAL ISSUE
MARKETS, THAT IS WHY NOT IN
ANTICIPATION OF THE FED IT IS
BECAUSE YOU ALREADY HAVE
LEADING INDICATORS PULLING
DOWN THE GLOBAL GROWTH,
TIGHTENING CYCLE, SURGE PAST
TWO YEARS HEADWINDS TO GROWTH
I THINK INFLATION SLOWS
SIGNIFICANTLY, REMINDS ME A
LITTLE BIT OF 2011 INFLATION
IN EUROZONE UP TO 3%, THEY
TIGHT END ENVIRONMENT THAT
ECONOMY WAS FRAGILE, THEY MADE
IT ACTUALLY EVEN WORSE SO I
WOULD AGREE IF FED STEPS IN
TIGHTENS AGGRESSIVELY YES
GOING TO MAKE GLOBAL BACKDROP
WORST RISK OF GLOBAL RECESSION
FOR 2023, U.S. GROWTH WOULD BE
WEAKER THAN I WOULD OTHERWISE
THINK AGAIN WE DON’T THINK,
THE FUNDAMENTAL SPORT
AGGRESSIVE HERE BECAUSE OF IF
INFLATION PULLS FORWARD WAS
DUE TO SURPLUS PUT IN PLACE IT
IS GONE, YOU SQUEEZE THAT LOW
END HE CONSUMER THEY NO, NO
LONGER THE EXCESS CATCH
STIMULUS PAYMENTS DONE, WILL
IT -- AT A TIME COMPANIES HAVE
TOO MANY INVENTORIES
PRODUCTION ENDS UP BEING CUT
YOU WILL SEE WE WOULD ARGUE
DEFLATION, SO NO I DON’T THINK
FED NEEDS TO BE AGGRESSIVE BUT
CERTAINLY THE FEAR OF THAT IS
CONTINUING TO ROIL MARKET I
HAVE TO REPEAT COMMUNITY IS
IGNORING GLOBAL BACKDROP WE
ARE GLOBAL ECONOMY MANY
COMPANIES ARE GLOBALLY BASED
TIGHTENING CYCLE SET TO SLOW
ECONOMY IN 2023 FED WOULD MAKE
IT WORSE BUT SO WOULD RUSSIA, BIG TIME RAISE SECTOR FROM
BIG TIME RAISE SECTOR FROM
FIRST TIME GLOBAL ROOEKS REAS
HEING 2023 I HOPE NOT.
>> YOU YOU WERE POSITIVE IN
202S SAW EXCLUSIVE DEMAND ON
FIRE MIDYEAR END OF YEAR THAT
IS GONE THEY SPENT MONEY I AM
HEARING THAT THE SUPPLY-SIDE
OF THE ECONOMY, IS A DISASTER,
THAT THE CHIP SHORTAGE
WORSENED END OF LAST YEARS
YOU’VE GOT A DEMAND QUESTION
NOW YOU’VE GOT A SUPPLY
PROBLEM.
WHAT IS YOUR TAKE THERE?
>> WELL, WE THINK THE
SUPPLY-SIDE IS ACTUALLY
ALREADY STARTING TO EASE
SUBSTANTIALLY YOU STARTED TO
SEE AUTO PRODUCTION SLOWLY
PICK UP I DON’T THINK THEY
WANT TO INCREASE
AGGRESSIVELY, CONSUMERS DON’T
HAVE FIREPOWER TO BUY NEW CARS
IN 2022.
SO EXACTLY I THINK 2022 MANY
INSTANCES OPPOSITE WHAT WE SAW
2021, STIMULUS GONE PRICES
EITHEREN BIOCUSTOMER
PURCHASING POWER WASN’T CASE A
YEAR AGO THE FACTION CHANGED
YOU MUST LOOK AT ECONOMY VERY,
VERY DIFFERENTLY, I THINK THE
SUPPLY CHAIN PROBLEM WE ARE,
UP SIGNIFICANTLY A LOT OF,
BOATS L.A. LONG BEACH PORTS
OFF-LOADING THOSE BOATS WE
THINK VETERAN COMMUTATION
REMINDS US Y2 K MAY BE
PROBABLY DON’T REMEMBER I
CERTAINLY DO, THAT DID END IN
-- I THINK A -- TODAY MANY
CONSUMER COMPANIES.
Y2 K WAITING TO SEE CLOCKS
WOULD BREAK CASE YOU WERE
GOING TO YEAR 2000 THEN ONE BY
ONE EVERY COUNTRY NOTHING
HAPPENED, IT WAS -- [LAUGHTER]
-- ONE BIG EXPECTATION, AND IT