THE NORTH AMERICAN DECADE?—INDUSTRIAL POLICY LEADS TO REPATRIATING ASSEMBLY AND DISTRIBUTION FACILITIES— ENHANCED REGIONAL SUPPLY CHAIN RESILIENCE–HIGH LABOR COST MANUFACTURING RESHORED TO MEXICO—BENEFITS LONG-TERM INVESTMENTS IN AUTOMATION/AI– NORTH/SOUTH LOGISTIC SYSTEMS/DIRECT CARRIERS–MEXICAN STOCKS–SELECT EMERGING MARKET FUNDS

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The North American Decade—Industrial Policy-Rebuilding Assembly, Manufacturing and Distribution in North America This Commentary, along with a future one, outlines our forecast for a North American decade. The Biden Administration’s Industrial Policy coupled with building resilient regional supply chains could potentially steer our economy towards bringing back assembly, manufacturing, and distribution to North America. However, the Administration’s Industrial Policy will …

TAX HIKES COMING?–CURRENT TAX LAW SUNSETS IN 2025— 2024 ELECTIONS KEY TO FUTURE TAX LAW CHANGES—FISCAL LIMITS FOR DEFENSE AND SOCIAL SPENDING—RAPIDLY RISING INTEREST COSTS AND DEFICITS – PRESSURES FOR NEW REVENUE SOURCES–VALUE ADDED TAX IN OUR FUTURE?–FED PIVOT—LENGTHEN FIXED INCOME DURATION

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Current Tax Law Sunsets in 2025–2024 Elections Key to Future Tax Changes Next year’s elections will prove crucial for investors as the 2017 Tax Cuts and Jobs Act (TCJA) sunsets at the end of 2025. The next President and Congress will need to address this challenge amid record budget deficits and interest costs. Those imbalances will limit fiscal spending flexibility …

Fed Rate Cut Late In First-half Of 2024?—creates Reinvestment Risk For New Short-term Investments Made Early In 2024 –record Budget Deficits–higher Rates For Longer—end Of Abnormal ”cheap Money” Era?—attractive Real Long-term Treasury Rates—2017 Tax Law Expires In 2025—2024 Elections Key To New Tax Legislation—

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Higher for Longer—The Likely First Rate Cut—Reinvestment Risk for Treasury Bills Follows Our previous Commentaries focused on how the Fed’s failed stop-and-go rate experience in the seventies could potentially shape current policies. Given those concerns, members of the Federal Open Market Committee (FOMC) project only two rate cuts for 2024 as they emphasize a “higher for longer” funds rate approach. …

FED A HAWKISH HOLD—OCTOBER/NOVEMBER FED MEETING LIKELY ANOTHER HOLD—BUT A CLOSE CALL—FED HIGHER FOR LONGER—RATE CUT UNLIKELY BEFORE SECOND QUARTER— HIGHER RATES, LONGER REFLECT ECONOMIC RESILIENCE

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OCTOBER/NOVEMBER RATE DECISION WILL LIKELY DEPEND IMPORTANTLY ON THREE CPI AND FOUR PCE PRICE INDEX REPORTS PRECEEDING THAT MEETING—CLOSE CALL BUT EXPECT FUNDS RATE UNCHANGED IN NOVEMBER In its September meeting, the Fed kept an unchanged but hawkish hold on its target range of 5.25-5.50%. Out of the nineteen members of the Open Market Committee, twelve looked for another increase …

Fed Manages Unprecedented Tightening Cycle—core Inflation Outlook Trending Favorably–declining Wage Increases Will Likely Reflect Pass-through Of Lower Future Inflation—history Shows Relative Stable Equity Markets In Presidential Election Year — July Funds Rate The Peak Rate?—peak Rate Continues Some Time Into 2024

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Fed Manages Unprecedented Tightening Cycle—so Far Successfully—reduced Inflation While Unemployment Remained Historcally Low The Recent July Consumer Price Index (Cpi) Report Underscores The Fed’s Apparent Success, So Far, In Effectively Managing Inflation While Simultaneously Keeping Historically Low Unemployment Rates. This Achievement Would Mark An Unprecedented Tightening Cycle. The Uniqueness Comes Primarily From The Unprecedented Speed At Which Interest Rates Rose …

Economic Momentum Perplexes Forecasters—interest Sensitive Sectors Defy Fed’s Rate Increases–consumer Spending Slowed After January—dwindling Excess Consumer Savings Clouds Holiday Spending— Encouraging Inflation Signs—could July Rate Hike Be The Peak?

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Economic Momentum Perplexes Forecasters The Covid Pandemic Caused, In Part, Disruptions And Accelerated Changes That Continue To Puzzle Economic Forecasters In The Current Economic Environment. A Clear Example Of This Can Be Seen In The Better Than Expected 2% Growth For The Final Estimate Of First Quarter’s Real Gdp Growth. However, The Growth Disparity Between Gdp And Gdi Rates Suggests …

Post-covid Disruptions Produce Both Greater Economic Uncertainties And New Investment Opportunities—excess Savings Supports Consumer Spending Through The Holiday Season——fed Should Stabilize Inflation By Setting A Range Rather Than A Single Point Inflation Goal—investors Should Expand Ther Focus Into 2024 To Take Advantage Of Narrow Breadth Market Rally

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Post-covid Disruptions Produce Greater Economic Uncertainties The May Jobs Report Surprised Everyone By Substantially Exceeding All Forecasts. This Example Highlights The Frustrations Economists Face Attempting To Forecast The Current Economic Outlook. The Most Forecasted Recession In History Remains Just That, With Its Likelihood Pushed Further Out. The Greater Than Normal Economic Uncertainty Likely Reflects Disruptive Changes Either Caused Or Accelerated …

Fed Dancing Between The Raindrops—fighting Inflation While Avoiding Economic Hit—5-5.25% Likely Peak Funds Rate–core Services Inflation Trending Lower—positive Impact On Pce Price Index–shelter Inflation Likely Trending Lower In The Second Half— Positive Impact On Cpi

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Fed Dancing Between The Raindrops—fighting Inflation—avoiding Recession— Fed To Keep Funds Rate Steady Until Year-end—strongly Committed To 2 Percent Inflation Objective—5-5.25% Likely Peak Funds Rate Act One Of The Hiking Cycle Likely Ended With The Fed Increasing Its Funds By 25 Bps To 5-5.25 Percent. The Fed Signaled This Funds Rate Will Likely Prove To Be The Peak/terminal Rate When …

Debt Ceiling–april Tax Collections Fall Short—debt Ceiling X-date Moves Closer—slim Republican Majority—swing District Republicans Likely To Vote For A Higher Debt Ceiling–debate May Increase Equity Market Volatility—seek Out Investment Opportunities That May Result

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Debt Ceiling Uncertainties—extraordinary Measures Will End Soon Uncertainty Continues To Grow Concerning The Outcome Of The Debt Ceiling Debate. Treasury Reached The $31.4 Trillion Debt Ceiling Borrowing Limit January 19th Without Congress Passing An Increase. Since Then, Treasury Employs “extraordinary Measures” To Pay Its Bills And Delay Bumping Up Against X-date—when The Government Cannot Fully Pay Its Obligations. Among Its …

Fed “may’ In May—powell No Rate Cuts This Year– Markets Look For Cuts At Every Fed Meeting— Systematic Cause For Bank Deposit Runs, The Fed Itself– Reduced Mid-sized Bank Deposits Restrain Credit And Economic Growth–a Shortage Of Growth Favors Growth Equities—focus On Upcoming Banks Quarterly April Earnings Releases—commercial Real Estate Loans Dominate Mid-sized Banks—most Mid- Sized Banks Meet Federal Risk Tests——fed Needs To Catch Up To Systematic Communications Revolution

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Fed “may” In May, Rates Peak, Powell No Rate Cuts This Year, Financial Futures Markets Look For Rate Cuts At Every Fed Meeting Post May The Fed indicated at its March meeting that, “if appropriate,” it will raise the funds rate at its next meeting in May another 25 bps to 5.0-5.25%. The Fed’s policy statement in March also shifted …