Inflation News, Banking Shifts, and Quantitative Tightening
The Money Wise guys start this week’s show with a rapid-fire market recap. Last week showed the Dow up 1.2%, the S&P 500 up 0.8%, and the NASDAQ up 0.3%. YTD the Dow is up 2.2%, the S&P 500 is up 7.8%, and the NASDAQ is up 15.8%. It was a very busy week with inflation data and, all in all, things are moving in the right direction. Year-over-year inflation is at its lowest rate in nearly two years, and the CPI and PPI numbers contributed to some positive sentiment for the markets. The guys also discuss retail sales and industrial production numbers, noting that industrial production was above expectations. The guys also discuss interest rates increasing a bit, why that could be happening, and continuing shifts they’re seeing in the banking industry. Warren Buffet says he expects more bank failures in 2023, but what does that mean? The guys mete it out and discuss possibilities, looking at the Fed’s quantitative tightening, too.
A Primer on Quantitative Tightening
Since the guys dig a bit into the specifics of quantitative tightening in this episode, it’s a good time for a quick review of what it all means. Quantitative tightening is a contractionary monetary policy tool designed to reduce the Federal Reserve balance sheet. Also known as balance sheet normalization, quantitative tightening is the opposite of quantitative easing.
In the second hour, the Money Wise guys share a helpful “Are You Ready for Retirement?” quiz. You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.