Category Archives: The Economy

Economic Dissonance

Market Memo

August 2024 – By Daniel Zalipski CFA®

F. Scott Fitzgerald once stated, “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.”  The phenomenon he is describing, simultaneously holding two or more contradictory beliefs, is known as cognitive dissonance.  It is more commonly associated within the field of psychology, but the concept is catching the attention of investors struggling to make sense of an increasingly complex landscape as two dissonant economic reports continue to report contradictory and perplexing results. 

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Between a Rock and a Hard Place

Market Memo

August 2023 – By Kyle Rohrwasser

A little history before we jump in, many people use this saying in their everyday lives, but many don’t know the origin. It was the actual origin of the idiom that comes from Homer’s Odyssey. In Homer’s Odyssey, Odysseus must pass between Charybdis, a treacherous whirlpool, and Scylla, a horrid man-eating, cliff-dwelling monster.

Although not a monster, the Fed has found itself in a situation that has one long-term solution but the timing of it will be tricky. As stated in many previous articles, the Federal Reserve has raised rates dramatically over the last year and a half, moving from 0% to 5.25%. This was done in the face of record-breaking inflation over the last 40 years, hoping the economy would slow and drive prices down. We have seen inflation fall from a 9% high in June of last year to a 3% month-end July of 2023, still short of the Fed’s 2% goal. Everything leads to lower rates eventually, but the question is, can the Fed time it correctly?

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