The Independent Market Observer

Quick Takes: The Economy, the Fed, and More

Posted by Brad McMillan, CFA®, CFP®

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This entry was posted on Jun 12, 2019 4:32:00 PM

and tagged Commentary

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economyThis has been a busy week of catching up after attending another round of excellent Commonwealth conferences. So, today I have just a few quick takes on some wide-ranging topics.

The economy

In terms of the economy, things are not as good as they looked at the end of the first quarter but not as bad as they may seem now. Job growth and confidence remain high, and businesses are still positive. As I’ve said before, we have never had a recession with conditions like they are now. Most of the worry stems from politics—and largely from tweets. Would you sell your stocks because of a tweet? Although risks are rising, conditions are not nearly as dire as the headlines suggest.

The Fed

I had the privilege of speaking to a group of very senior executives yesterday. It was certainly one of the most interesting, engaged, and fun groups I have ever spoken to. These were very intelligent and informed people, but they still had a lot of questions about what the market and economy are doing and where they are going. This uncertainty was a great illustration, for me, of the fact that even the smartest people can struggle to figure out what is really happening. It gives me even more sympathy for the Fed as it tries to decide what to do about rates. I would be surprised—but not shocked—to see a rate cut in the next couple of meetings.

The news cycle

In one of my standard talks, I point out that over the past several years we have, at various points, been worried about both the strong dollar and the weak dollar, both high oil prices and low oil prices, and both China taking over the world and China collapsing. In all cases, everything was fine. When I look at the headlines today, I see similar problems. Will the president be impeached, or will the Democrats not impeach? Will we have tariffs on Mexico or not? The lesson from the first set of headlines is the same one we should apply to the second set: follow the fundamentals, not the headlines. Newspapers (and cable news) predict disaster 100 percent of the time—and they are usually wrong.


I am delighted to see summer weather but could use a bit more sun and a bit less rain. Lots of rain seems to be a countrywide phenomenon this spring to summer. Enough already!


Family. Once again, my family is starting the summer with a full schedule and not enough time to do all the great things we want to. This is a good problem to have, of course. As my son gets older, it seems like the weekends and summers get shorter and more packed. We are done with sports for the season, and school has just a couple more weeks. I am grateful he is growing up with so many interesting and fun things that we can share.

Commonwealth. As I started with, the conference season has just ended, during which I got to spend time in great places with great people, my Commonwealth colleagues and friends. You won’t find a nicer group of people on the planet, and I am reminded of that every year when we get to hang out together. Thank you all for the good times!

My readers. I started this blog seven years ago and have written, at a rough estimate, about one million words. Thank you for reading. It has been a very interesting and educational journey for me, and I hope you are getting even a fraction of what I do out of it. It is a privilege that you share your time and attention, and I will never take it for granted.

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