Why the Fed’s Rate Decision Marks a Profound Shift in Monetary Policy | James Aitken

Hidden Forces

Demetri Kofinas

Government, Business

4.8 • 1.6K Ratings

🗓️ 30 September 2024

⏱️ 57 minutes

🔗️ Recording | iTunes | RSS

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Summary

In Episode 383 of Hidden Forces, Demetri Kofinas speaks with James Aitken, a financial markets veteran and advisor to many of the world’s most powerful, sophisticated, and successful investors.

In the first hour, Demetri and James discuss all that has changed since Aitken was last on the podcast three years ago, which came just as the world had started to re-open from Covid and before the Fed began its very long and determined tightening cycle in the Spring of 2022.

They discuss the Fed’s recent 50 basis point rate cut, its renewed focus on supporting the labor market (possibly at the expense of inflation), and why James Aitken believes this is a profound regime change in monetary policy that investors need to understand and incorporate into their investment frameworks going forward.

In the second hour, Aitken and Kofinas apply the framework they developed in the first hour to help listeners understand a set of interlocking macroeconomic, political, and geopolitical challenges facing investors. These include (1) the economic and national security policy changes underway in China, (2) the fiscal pictures in the U.S. and Europe, (3) and what a Trump 2.0 administration could mean for markets and the economy.

They also discuss the case for commodities, the implications of a multi-decade reversal in monetary policy by the Bank of Japan, how the Fed’s pre-emptive rate cuts might reignite inflation, and what all this means for the value of the dollar, commodities, and the role that Gold could and should play in people’s portfolios going forward.

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Episode Recorded on 09/25/2024

Transcript

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0:00.0	What's up everybody? My name is Demetri Kofinas and you're listening to Hidden Forces, a
0:06.4	podcast that inspires investors, entrepreneurs and everyday citizens, the challenge consensus narratives and learn how to think
0:15.4	critically about the systems of power shaping our world. My guest in this
0:20.2	episode of Hidden Forces is James Aitken, a veteran of financial markets and an advisor
0:26.0	to many of the world's most powerful, sophisticated, and successful investors.
0:31.3	In the first hour of our conversation, James and I discuss all that has changed since he was last on the podcast three years ago,
0:39.0	just as the world had started to reopen from COVID and well before the Fed began its long and determined
0:45.2	tightening cycle in the spring of 2022. We discussed the Fed's recent 50
0:50.4	basis point rate cut, its renewed focus on supporting the labor market, possibly at the expense of inflation,
0:56.7	and why James believes this is a profound regime change in monetary policy
1:01.6	that investors need to understand and incorporate into their
1:05.0	investment frameworks going forward.
1:07.8	In the second hour, James and I apply the framework we develop in the first hour to help us understand a set of interlocking macroeconomic,
1:16.2	political, and geopolitical challenges facing investors, including the economic and national
1:21.8	security policy changes underway in China,
1:24.8	the fiscal pictures in the US and Europe,
1:27.3	and what a Trump 2.0 administration could mean for markets and the economy.
1:32.4	We also discuss the case for commodities, the implication of a
1:35.6	multi-decade reversal in monetary policy by the Bank of Japan, how the Fed's preemptive
1:41.0	rate cuts might re might reignite inflation,
1:43.6	and what all this means for the value of the dollar, commodities,
1:48.0	and the role that gold could and should play in people's portfolios going forward.
	...

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