YouSaid · the spoken record

Liz Young

lines on the record: 39
first: 2022-02-03
most recent: 2022-02-03
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Feels so there's that too. I mean, people that are down a lot in some of those growth stocks are feeling a little wounded right now, and it's tough to get back on the horse.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“A tightening cycle coupled with this high of inflation. Inflation has not been this high since the year I was born, so unless you are about fifteen or twenty years older than me, you haven't seen this either. So this is a new environment for a lot of investors, and it's something that newer investors in particular are not conditioned for because they haven't participated in that big drawdown and they haven't participated in the recovery afterwards. So it feels more emotional. It feels more short-term, and it's difficult to get optimistic about it and look through a long-term lens when the short-term pain feels very, very bad. And it is very much a psychological question. So we've got recency bias fighting against us. There's also a theory called loss aversion, where the pain of a loss hurts twice as badly as the joy of a gain feels, right? So you lose $5, it hurts twice as bad as gain.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“The reality of it is that the average total return on the SP annually is about eleven and a half percent. And I'd be really happy with 11.5% this year. And that average has moved up because of the great returns we've had in the last three years. It used to be when I started in the business, the average was about 7%, 7% or 8%. So when you look at those averages, it brings you back down to earth a little bit, but I think it has set people's expectations to be a little bit too lofty. And if you're a newer investor, not only if you just bought the dip, if you're a newer investor and there were many, many of these who came into the market for the first time after the pandemic, you have never seen this environment before. You've never seen a tightening cycle. And even old investors, I'll even call myself an old investor at this point have never seen maybe not never some of us have never seen.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“So I think it gives people recency bias. And what I mean by that is if you even just think about the And the recency bias is telling investors that they're going to be disappointed with anything under 15 to 20 percent in returns.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“That has driven a lot of adoption in crypto. So that's why we saw such appetite for it last year. And it just has become more mainstream for a lot of investors. But the reality of what's happening so far in 2022 is that crypto is not really acting like people wanted it to, right? We thought that it would be an inflation hedge and that has not worked out that way. I think Bitcoin peaked on November 9th most recently, and it has been in a pretty steep downward trend since then. It's still in a price discovery phase. It's still a very volatile asset. And in times like this, when the entire market is a little trepidatious, it doesn't trade like a store of value. It trades like a risk asset. So that's what we're seeing right now. And that may be the case for a good part of 2022 because this is where market sentiment is and that's just a fact of life.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“The idea behind crypto is that it's decentralized, so one central bank can affect equally around the globe. And crypto never stops trading. Our market closes. Asia opens, right? There are markets that are open throughout the day, but they're in different parts of the world. Crypto's trading all the time. And it's not affected just by one central bank. It's driven the adoption of crypto because there is fear. And I think there's some mistrust of policies from central banks. Can they get out of this safely?”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“There are a lot of emerging market countries that denominate their debt in dollars, so if the dollar weakens, their debt service suddenly becomes cheaper, which also is good for them. What it also means, though, is that part of the thesis around cryptocurrency is to be decentralized. So the definition of centralization is that you have one central bank that affects one currency, and that is a centralized monetary system.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Monetary policy, each central bank has an associated currency with it, right? The Fed has the dollar, so on and so forth. The ECB has the euro. You get the picture. Setting monetary policy directly impacts the value of the currency. So if we're moving in different directions and currencies are a relative game, right? Because there's no such thing as just here's how much the dollar is worth. Here's how much the dollar is worth versus this other currency. And that goes for every single currency around the globe. So as they're moving in all these different directions, you're going to see more volatility in currency levels throughout the year. And that can create opportunity, that can create arbitrage opportunity, that can create opportunity from a trade perspective. There are a lot of different ways to think about that. That can create opportunity from a commodity perspective, right? If the dollar weakens, most commodities are denominated in dollars, so that makes them cheaper to other parts of the globe.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so heightened currency volatility is because we're now in a situation where central banks around the globe are moving in different directions. For a long time they all moved in the same direction and they all sat at zero for a long time, right? So now we're getting to the point where they're tightening at different speeds. Some of them aren't ready to tighten at all. China's actually loosening again. And you've got this divergence of monetary policy around the globe.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“The Fed has to Be careful about not slowing down or using a blunt instrument that's going to slam on the brakes, right? And I think they're going to be very careful about that. The poor guy, Jerome Paul takes so much flack for did he do this too late? How was he saying things? Is he giving us enough information? Is he giving us too much information? All of this. He is trying, in my opinion, to do this in a graceful fashion, that he knows is going to cause some pain in markets, but in the long run, if it's done well and if it's done slowly enough, and gracefully enough, it will help the recovery continue because A stoppage of growth will stop the recovery, but high inflation will also stop the recovery. So he has to do this in order to give us a chance to continue on this path.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, well, they were stuck in a precarious situation before too because inflation was seemingly dead, right? And it was, how do we stimulate inflation? How do we create inflation? How do we create wage inflation? And if inflation is driven by demand, now some people would argue there are two different types of economists. There are demand-side economists and there are supply-side economists. So depending on who you ask, I probably err a little bit more on the demand side. But if inflation is driven by demand, I mean, inflation is an indication of healthy demand in an economy. So what we were seeing before, in my opinion, was demand that was less than we really needed it to be. Now we're seeing demand that's well above where we need it to be. We can't even satiate the demand and we can't satiate the demand for labor either. Now I'd much rather be in that position than in the one that we were in before all of this began. But I do think that”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“That's bigger than it has been before, meaning before, I think what we're conditioned for is that the Fed swoops in and saves us from any drawdowns. And I don't think that's happening anymore because we hit 70 new all-time highs last year. They don't need to save us from drawdowns. We're not in a terrible position. We're down 10% in an index that was up almost 30% last year. I mean, I hate to say it, but that's not that big of a deal. I think it's okay with them that that's the case. And it has shaken out some of the excess. So that level of, you know, where does it become a problem? Where does it actually scare the Fed that they would back off, I think is lower than people want it to be.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“So I keep saying this, and maybe it's The Fed cares about inflation. The Fed knows that its job is to control runaway inflation. I don't think we have runaway inflation, but it is to maintain stable prices. And 7% CPI year over year is not stable prices. There are components of the inflation picture that are up double digits and have been for months. That's not stable. So their job now becomes maintaining stable prices. And I think that they are willing to sustain a drawdown on the equity market.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Supply that just happens naturally because supply chains ease up. At the same time as a decrease in money supply, which would reduce the amount of demand directly, which should, together, reduce inflation. There was a first question, though, that I don't remember. So you have to remind me what the first part of your question is. Oh, yeah.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“So you take that amount of money and remember what I said about inflation is more money chasing the same or fewer amount of goods. So then uncheck the box about more money, right? So then we take that excess money out of the system, whether or not supply changes, that already eases the burden of inflation. And it should, hopefully, I think this is what the Fed is hoping happens. This is what we talk about when we say Jerome Pell is trying to thread a needle. This is the needle he's trying to thread. We both raise rates and control the money supply, so we reduce the amount of money that's chasing those goods. At the same time, that the supply chains start to ease up because people have gone back to work, we're reopening the economy, we're not in the stop start cycle anymore. We've got international economies that are reopened so we can get stuff from their factories. There's a lot of different forces that I think we're all crossing our fingers. They happen at the same time. And that time is about spring of this year. So you could actually see an increase in...”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“rather than December because people were worried they couldn't get their stuff so the consumption of goods has gone up the demand for goods has gone up the amount of money had gone up at the same time as supply also being constrained so When the Fed hikes rates, what it does primarily is reduces the amount of money in the system.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“So, what we've had for the last 18 months was definitely more money. Money supply went up due to low rates and asset purchases, so money being put into the economy. So money supply increased. We definitely had more money. Check that box. Chasing either the same amount or fewer amounts of goods. Yes, across the board, right? Fewer amount of goods because of supply chain issues we couldn't get everything that we were demanding. Also, consumers bought a lot more stuff, right? Think back to even just household supplies. We bought more toilet paper than we ever would have before. I mean, again, I live in New York. We don't have a lot of storage space. I used to only buy, you know, four or six rolls at a time and then suddenly it became like, oh my God, maybe I should buy more because what if there isn't any in a month? So we bought a lot more stuff and did this sort of stockpiling, hoarding thing of stuff. And we bought it earlier. So holiday shopping happened in November.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“I'll start with the second question first. Raising rates affects demand, not supply. So right now, if you think about a very simplistic definition of inflation, it's more money. Chasing the same or fewer amounts of goods.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Or they just changed the way that they felt about something, or you just ask the question differently, right? I mean, literally it matters how you take these surveys and when you take them throughout the month. So the market, though, is looking out a certain amount of months or quarters and saying, okay, we think inflation is going to moderate. We think it probably comes down around this level. The market is also taking into account the power of the Fed and the power that the Fed has to moderate inflation. So I think the market is looking at a few different factors. The market knows that the Fed is going to try to control inflation, whereas the consumer may be less optimistic that the Fed is going to be able to change the price of milk and the price of gas, right? It really does matter on your perspective. I think it does go to show, though, that consumers are feeling the pain of this, and it's also necessary to do something about it.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“As consumers, obviously the headlines are dominated by inflation lately, so it's all we're hearing about. It's top of mind, and it's just the first thing you think about. Also, it's hitting consumers directly. So food and energy prices have certainly changed, and those are hitting the consumer. So the sentiment around that and the feeling that they have around what they're paying for food and energy is going to affect that outcome when you survey a consumer. The market is looking at, depending on the time frame, the market is looking out a certain amount of months or quarters and saying, okay, inflation should moderate. And I think that's probably true. The market also moves quite a bit. And frankly, so does consumer sentiment. Consumer sentiment is very fickle. You could literally survey consumers on the first of the month and survey them on the 20th of the same month and get a completely different reading because something had happened in”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Year too. So you have to pick and choose and decide why you're buying something. Industrials, I think, can see decent growth in 2022. It's also a spot where you want companies to engage in CapEx. And I think that they should start doing that more in 2022. And Industrials is a place where if they're engaging in CapEx, you're going to see that more because it's an asset heavy sector. So if you're engaging in CapEx and buying hard assets for growing the business, industrials is a place where you see that sort of direct benefit.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Not necessarily, no. The sectors are pretty widely spread. And not all of the ones that I'm constructive on are showing great earnings opportunities in 2022. Financials had a great year in 2021, both earnings and price return. 2022 is expected to be not necessarily all that exciting for financials as far as earnings go, but I'm still constructive on the sector because of the interest rate picture. So it's not just earnings as the main driver. It's about the environment as well. Consumer discretionary, you have to be choosy in. So when we talked before about some of the reopening plays, when you think about travel and leisure, some of them do fall into that sector. So that's what I mean about being choosy and some of the casinos and gaming and event venues and that sort of thing would fall into consumer discretionary as well. But there is also a decent amount of consumer discretionary that is looked at as growth. So there's going to be pressure on those stocks and they had experienced a decent amount of multiple expansion in the last”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“And that's why you see selling pressure on misses. So the misses are going to get punished more, but it's really more about guidance at this point because the picture is still so cloudy for many companies in 2022 that it's not just about what were the results for last quarter. It's about what the CEO and the CFO say about their expectations for the coming four quarters.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Which means that there's more scrutiny on the earnings picture because valuations are a fundamental piece of the equation. Long-term growth potential is another fundamental piece of the equation. Earnings is when we hear from companies about the health of the fundamentals, right? So if we hear from them that they missed estimates, it's going to get punished more because valuations had been elevated last year and then it starts to be, okay, but now you missed which changes the outlook, then why am I paying this much for the stock?”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“I think this year as rates continue to be in the forefront of everybody's minds, valuations matter a lot more than they did in the last 18 months. And it's not that valuations didn't matter at all, but they mattered a lot less when rates were zero and when liquidity was still plentiful. So going into a period where we're not just tightening in the sense of raising rates, we're tightening in the sense of we're stopping buying bonds and we're thinking about rolling assets off the balance sheet. That's three different steps of tightening. So valuations are going to matter quite a bit more. It matters what you pay for something and what its long-term prospects are.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Well, the first thing that's important to remember is that we measure earnings year over year on a quarterly basis. So Q4 of 2021 is being compared to Q4 of 2020. When you look at things like GDP growth, it's generally measured on a quarter over quarter basis, so Q4 is compared to Q3 of the same year. That's what people mean when they talk about base effects. It's what is it compared to? So the growth rate, if you're looking at a very small base, the growth rate is going to seem a little exaggerated. And that's still the case for the fourth quarter of 2021, which is the earnings season that we're in right now. So, expecting somewhere in the low 20% range of growth in earnings for Q4 of 2021. But again, that's compared to Q4 of 2020 when things were still, we had shut back down because coronavirus had started spreading again. So anyway.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Heavily dense metropolitan area versus the suburbs. The suburbs are a little bit easier to get around and different than being on top of each other like sardines in a place like New York City where we have to be a little more careful.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Completely depends on where you are in the country. I think where I am in New York City, I'd give it about a six or a seven. There's still less activity than there would be normally, but there's certainly pockets of it. I mean, we can't do much here without proof of vaccination. So if we want to dine inside at a restaurant, we have to show proof of vaccination. If we want to go to a gym inside and not wear a mask, we have to show proof of vaccination. You have to show it everywhere. So happens that most of New York City is vaccinated, so that's not an impediment to activity. There are obviously other parts of the country where there's not quite as widespread of a vaccination rate. So if they put that sort of measurement in place, you probably wouldn't see as much activity. There are also parts of the country. I mean, Florida, for example, right, or Texas parts of Texas that have been pretty open for a while and even parts of the Midwest have been pretty open for a while and it feels normal. So and it also depends on if you're in a”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Hotels, all of it, right? That stuff, I think, can do well this year because each time we have a new variant, we still get scared and we still do change our behavior a little bit, but we change it less each time, and we get over it faster. So there might be a minor shock in the short term, but that term becomes shorter and shorter. And as we get further into 2022, I think the travel restrictions get lifted for good in more places. We haven't traveled much outside the US as US citizens. We're going to start traveling across borders. I think people are hungry to do that more. And I think international travelers are hungry to come back here. I mean, I'm in New York City. It used to be that summer was full of European travelers here. And that obviously has not been the case for the last two years. So a lot of that activity that picks back up is more of the reopening that I'm thinking of now. So it's more the reopening in services, especially travel.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“This has changed a little bit over the last year or so. We used to call the reopening sectors some of those ones that were at the center of the pandemic that got hit the hardest because we shut down. Now it looks a little bit different. I would almost prefer, and this is a little nuanced of a statement, but I would almost prefer to say, I'm just not in the stay-at-home camp anymore. So a lot of the stocks that had benefited because we were staying at home, so things like communications or stay-at-home workouts working from home, anything that had benefited on that side of the equation, I think that a lot of the demand that those companies saw and a lot of the run up in price that the stock saw, the strongest stuff is behind us. So we're not going to see that kind of strength going forward. Now, a direct reopening play would be things like travel and leisure. It would be casinos and gaming. It would be event venues. So travel and leisure, including all of the different things like airlines.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“In the triple digits, not the double digits. So we've got a ways to go if there was a time when I would start to worry that energy prices had gotten way out of hand. But it is something that you have to watch when they go up this quickly.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“And energy prices, because more often than not, a spike in energy prices has preceded a recession. So although you can paint it as a positive that energy has done well so far this year, meaning that the cyclical sector has done well this year, or you can say, well, okay, it's done okay, it's done well, right? Personally, I'd like it to slow down a little bit because you don't want to see it get out of hand to a point that it stresses not only companies, it stresses consumers in gasoline prices, it stresses airlines and fuel prices, right? So you don't want to see it get out of hand to the point that we start to worry that it's a signal of something terrible on the horizon. I do, though, think that there is still more runway for energy. Now, I don't think we're at a breaking point yet. We briefly touched 90 the other day in Brent. I think that that breaking point is...”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“There's a lot to unpack in that because if we're comparing XLE, which is the energy sector ETF to ARC, they couldn't be further ends of the spectrum, right? They are stark opposites. And ARC is investing in companies that are expected to be very innovative and probably couldn't be more dependent on long-term growth potential and more sensitive to long-term rates or rising rates. So it's no surprise that those companies are seeing a lot of pressure this year. Energy, on the other hand, it isn't quite as black and white as that. So yes, energy generally is thought of as a cyclical asset type, cyclical sector. What we're seeing right now is partially inflation related. And one of the things that you can look at as an indicator of stress in the market, or some people would say impending doom, right, is”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, yeah. I love the concept of duration. The ultimate sort of long duration stocks are very sort of visionary stocks, whether it's mining asteroids or electric planes. And then on the total opposite side of the spectrum, you've got iron ore miners, things where it's not at all about the future coal miners. And I think Liz, nothing epitomizes that more than the spread between, let's say, the energy sector. Let's just say XLE relative to Arc ARKK, which is a disruptive technology sector that was at the forefront of 2020 and the first part of 2021 recently had some headwise headways. Liz, it's been remarkable to me. Well, you've pointed out number one that the energy is one of the few sectors, if not one of the only sectors, that's up in the S&P 500 year to date, and also been remarkable to me just how steadily XLE has performed ARKK. I've struggled to find more than a handful of days where going long, you know.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Year, you see the NASDAQ in a deeper correction than the SP and the Dow. Short duration assets, which, and this goes for equities, short duration assets tend to be more in those value categories. So short duration, you can think of them, some of them as dividend paying stocks. A lot of those fall into the staples and utilities category, but also some of the more cyclical assets that fall into sectors like financials, energy, industrials, even some of the materials that aren't as dependent on rising rates or a steady rate picture. And actually, in the case of financials, should benefit from rising rates. So that's where the trade-off comes in, and that's the rotation that we've seen to start this year. Granted, the rotation has been negative for everybody, but still the rotation that we've seen, and that's why it makes sense.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“Year yield, right? People buy long-term treasury bonds when they're afraid. So when they're not afraid, they should sell them. And the yield should go up. And that's partially what's happening right now. It also goes up as a result of the expectation of rising rates, the expectation of inflation staying high for a little bit longer of a period of time. And that in turn makes you look back at the equity market and say, okay, so if the risk is on the longer end of duration, so if 10-year yields should go up, right, that's the longer end of duration, then which equities are more exposed to that longer end of duration? And the answer to that is growth. Growth equities are more exposed to that. They get hit harder by a rise in long-term rates. So as the Fed raises rates, as inflation goes up, as the 10-year goes up, growth assets get hit harder, which is exactly what we've seen.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“The idea behind will start with yields, yields going up because we're going to raise policy rates. And when you think about the reason that we're raising policy rates, yes, it's to control inflation, but the Fed is also comfortable doing that because we're in a pretty strong economic condition. We've got decent growth. We have a labor market that's recovered to pre-pandemic levels in some areas, but it's tight and it's a strong labor market, plenty of jobs available. We've got a consumer who has been spending and buying a lot more goods than they used to, but a consumer who's been spending, and a consumer that's in good shape from a balance sheet perspective. And we've got, we're going to, right now we're hearing about earnings, but it should be our fourth straight quarter of over 20% earnings growth. So we're in good shape as an economy and as corporate America. Because of that, you shouldn't see a depressed 10 years.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“With the market because what happened in 2021 didn't make a lot of sense. We had 10-year yields that remained historically low in the face of high inflation and the expectation of rising rates. So that didn't make sense. I don't like it when the patterns don't make sense. And we had continued rallies in tech. And granted, there were sometimes throughout the year where it went back and forth, but that didn't make sense either, right? There shouldn't have been huge rallies in tech. Value should have been a more clear outperformer. So what we're seeing so far in 2022 makes a decent amount of sense. I'm okay with it. I think that this needed to happen as a transition into the next phase of this economic cycle.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT
“It's obviously been a rough start to the year, and frankly, I think this is a little overdue. So if we even just rewind about six months and look at the second half of 2021, we knew rate hikes were going to have to come at some point. We knew that inflation was not as transitory as everybody believed it to be. And we had started our tapering program by the end of the year. Having only seen a 5% correction in the broad markets up through the end of the year, this was necessary to shake out some of the excess and shake out some of what I would call multiple expansion that's happened as a result of liquidity and low rates for so long. So a lot of the stress that we're seeing right now, although it seems dramatic and it seems really painful, the pattern that it's happening in makes sense. And that, to me, believe it or not, gives me a little bit more calm.”
2022-02-03 · Forward Guidance · The Fed Doesn't Care About Your Feelings | Liz Young · IDENTIFIED FROM THE TRANSCRIPT