E20 - New Challenges for the Fed with Lundy Wright

Lundy Wright

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Now that the Fed has finally hiked rates, which surprised no one, we should expect to see a sea of prognosticators turn their attention to what the future holds for Fed policy. In this episode, host G3 speaks with Weiss's Lundy Wright about structural forces that play into future Fed decisions. Lundy has been watching the Fed for decades and brings a perspective and wisdom to the table that few others have.

 

 

While not surprised by the Fed’s press conference, Lundy says that Chair Powell was more hawkish than many had expected. Still, while the Fed did provide some measure of clarity to the markets for this year, he believes that there is a fair bit of uncertainty lingering.  

Topics Lundy and G3 proceed to cover include how the Fed’s job could be complicated by deglobalization and the divergence between nominal and core inflation. As it relates to deglobalization, Lundy believes that recently enacted protectionist policies create greater uncertainty with respect to some of the models that the Fed uses.

Lundy also makes a point of identifying how inflation is experienced differently by companies and consumers. G3 concludes the conversation by asking Lundy whether Americans will become house-poor in the near future and how his card counting background influences the way in which he trades and analyzes the Fed.

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