GM65: Why Fed Will Raise Rates Next Year ft. Adam Posen
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 715 Ratings
🗓️ 17 July 2024
⏱️ 63 minutes
🧾️ Download transcript
Summary
In this episode, Alan Dunne welcomes former central banker and current President of the Peterson Institute, Adam Posen, to discuss the economic outlook and monetary policy. Posen explains why he believes markets are mistaken in expecting rate cuts next year and identifies the key factors driving stronger economic growth. They explore global central banking and monetary policy, examining the successes and challenges of inflation targeting, the models used by central banks, and the most important variables to monitor for policy decisions. Posen also discusses why inflation targeting may become more challenging in the coming years and argues that less forward guidance from policymakers could be beneficial. They discuss the outlook for fiscal policy for the next administration and Posen explains that while a fiscal crisis is not his base case, he foresees significant upside risks to bond yields in the coming years.
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Episode TimeStamps:
02:10 - Introduction to Adam Posen
05:45 - Was it all about luck?
07:40 - Was the Covid19 period handled the wrong way economically?
12:06 - Are we going into more challenging times for inflation targeting?
13:56 - The political pressure on central banks
16:48 - The challenges of inflation targeting
23:47 - A micro-managing nightmare?
29:50 - What are the most important factors for policy makers?
35:16 - The lags of monetary policy
39:47 - How the structure of the economy impacts the monetary transmission mechanism
48:15 - Posen's view on the economy
51:07 - Are central banks inflating the debt away?
53:49 - A Fiscal crisis incoming?
01:00:10 - Artificial Intelligence - a game changer?
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Transcript
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| 0:00.0 | For a variety of reasons, not just officials who can't, but markets don't seem to be pricing |
| 0:13.7 | improperly the inflationary effects of these policies or the inflationary effects of the fiscal policy. |
| 0:22.2 | And so I think by a year from now, the Fed's going to be raising rates was a very high-level |
| 0:29.4 | confidence. |
| 0:32.0 | Imagine spending an hour with the world's greatest traders. |
| 0:35.9 | Imagine learning from their experiences, their successes, |
| 0:38.6 | and their failures. Imagine no more. Welcome to Top Traders Unplugged, the place where you can learn |
| 0:45.9 | from the best hedge fund managers in the world so you can take your manager due diligence |
| 0:50.4 | or investment career to the next level. Before we begin today's conversation, remember to keep two things in mind. |
| 0:57.0 | All the discussion we'll have about investment performance is about the past, |
| 1:00.7 | and past performance does not guarantee or even infer anything about future performance. |
| 1:05.7 | Also understand that there's a significant risk of financial loss with all investment strategies, |
| 1:10.0 | and you need to |
| 1:10.9 | request and understand the specific risks from the investment manager about their product |
| 1:15.4 | before you make investment decisions. |
| 1:17.8 | Here's your host, veteran hedge fund manager, Nealz Kostrup Larson. |
| 1:35.0 | Welcome and welcome back to another conversation in our series of episodes that focuses on markets and investing from a global macro perspective. |
| 1:45.7 | This is a series that I not only find incredibly interesting as well as intellectually challenging, but also very important given where we are in the global economy and the geopolitical cycle. We want to dig deep into the minds of some of the most prominent |
| 1:51.7 | experts to help us better understand what this new global macro-driven world may look like. |
| 1:57.3 | We want to explore their perspectives on a host of game-changing issues and hopefully dig |
| 2:02.6 | out nuances in their work through meaningful conversations. Please enjoy today's episode, hosted by Alan Dunn. |
| 2:12.6 | Thanks for that introduction deals. Today I'm joined by Adam Posen. Adam is president of the |
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