Fed and inflation: You can’t always get what you want

Seeking Alpha/Sonai Desai, Franklin Templeton Investments/12-19-2021

“Investors now need to brace for higher volatility. The Fed has acknowledged it needs to react to high inflation and adjust its policy; this will limit its ability to support and stabilize asset prices, and markets will need to adjust and get used to it. On top of this, the economy remains subject to significant uncertainty: from developments in the COVID-19 pandemic to the way companies are adjusting to supply chain disruptions, to changes in economic policy around the world. It looks like 2022 is going to be another interesting and challenging year. In some ways, perhaps, not at all the kind of interesting we were looking for – but let’s try and make the best of it.”

USAGOLD note: Kind of a soft warning from Franklin Templeton on the year to come … but one worth filing for future reference. One thing is certain: The new year will offer its fair share of surprises, a good portion of which will be centered around what the Fed does or doesn’t do.