Market Outlook Fall 2022
Howe & Rusling Macroeconomic Committee
Yet another Market Outlook with a thousand moving parts. Now I know why there were only eight fellow graduates when I got my economics degree versus the hundreds in the other business degree disciplines of marketing, business administration, or even accounting. I should have taken a hint then, but the degree has served me well, and a thousand moving parts instills patience, as every part has its place and patience is needed to piece them all together.
Patience is paramount now as we wait for each part to find its spot in this machine we call an economy. I still remember back from macroeconomics class the action-reaction we are seeing play out in real time, all based upon the simplest of principles: supply and demand. We could go through the entire cycle that got us here, which is almost textbook (other than a pandemic), but this is an Outlook, so we need to focus on the future.
The problem with the future is we do need patience, and while I mentioned textbook, this is not 100% true for the future. As any engineer or mechanic will tell you, every project they undertake always has a wrinkle or two, which will complicate the job. Eventually, all comes together, but adaptation is typically required to get the desired result.
Right now, inflation is the problem, and interest rates are the wrench of choice. The challenge is how hard will the wrench have to be torqued to get the desired results? Will the lug nut break and throw a proverbial wrench into the works, requiring a modified approach? Perhaps. In the end, we believe patience will be rewarded, and the laws of economic theory will eventually play out.
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