Doll’s Deliberations

Rate-Cutting Resumes But Will Likely Be Limited

Asset market trends might lead one to conclude that a disinflationary boom is underway. Bond markets are well bid, and policy rates have declined in the past year, while most risk-asset markets are still flying high despite rich valuations.

09/22/2025

Doll’s Deliberations

The Fed’s Focus on the Labor Market (at the Expense of Inflation) Paves the Way for a Cut

The U.S. economy is drifting toward a slow growth, sticky inflation environment. Growth has cooled from the past two year’s strong pace, and employment growth in particular has markedly slowed. Yet underlying inflation has proven sticky this year ...

09/15/2025

Doll’s Deliberations

Earnings Are Supportive, But Rich Valuations Limit Potential

Investors are in an exuberant mood (aside from some occasional indigestion), with the S&P 500 up markedly since early April on the back of a sharp rebound in Mag 7 stocks from this year’s lows, the AI theme, plentiful global liquidity and expansionary G7 fiscal policy . . .

09/08/2025

Doll’s Deliberations

Valuation Concerns Are Never a Timing Tool

Tensions between the Federal Reserve and President Trump have steadily increased this year, even though Chair Powell acquiesced to pressures by signaling an imminent rate cut in his Jackson Hole speech. However, the President wants much lower rates, not just the occasional 25-basis-point reduction . . .

09/02/2025

Doll’s Deliberations

Threading the Needle Gets Tougher

Mega cap growth stocks fell back last week (until Friday) following yet another climb to new highs. Valuations for these companies have become extended, similar to previous episodes when investment stampedes developed, because new technologies led to open-ended expectations at a time of plentiful liquidity . . .

08/25/2025

Doll’s Deliberations

Markets Are Priced for Declining Inflation (We’re Skeptical)

The enthusiasm of investors is becoming increasingly (and perhaps excessively) evident. Each new event is being interpreted more positively than would be warranted had global liquidity conditions not been so increasingly buoyant ...

08/18/2025

Doll’s Deliberations

Is the Bull Run in Extra Innings?

The investment backdrop in recent years has benefited from the seemingly endless amount of liquidity, resulting in almost all risk assets recording significant price inflation, leaving fewer appealing opportunities.

08/11/2025

Doll’s Deliberations

Risk-Reward Turning Unfavorable

Investors have thrown caution to the wind and embraced pro-growth monetary and fiscal policies, while discounting any of the upside inflation or other policy risks, such as several higher U.S. tariff rates.

08/04/2025

Doll’s Deliberations

Easing Tariff Angst and Fading Recession Risks Embolden Investors

After months of shifting dates and changing tariff rates, the U.S. administration has been able to nearly conclude a few trade deals. There are a lot more to go, including deals with our most important trading partners, namely China, Canada, and Mexico.

07/28/2025

Doll’s Deliberations

The Bond Market Is More Key Than Usual

The S&P 500 and NASDAQ yet again hit new record highs last week. The U.S. economy is still holding up well despite higher tariffs and related turbulence. A resumption of growth is likely in 2026 after some softness over the second half of this year. All bets are off if the tariff war escalates.

07/21/2025

Commentary

Asset market trends might lead one to conclude that a disinflationary boom is underway. Bond markets are well bid, and policy rates have declined in the past year, while most risk-asset markets are still flying high despite rich valuations.

The U.S. economy is drifting toward a slow growth, sticky inflation environment. Growth has cooled from the past two year’s strong pace, and employment growth in particular has markedly slowed. Yet underlying inflation has proven sticky this year ...

Investors are in an exuberant mood (aside from some occasional indigestion), with the S&P 500 up markedly since early April on the back of a sharp rebound in Mag 7 stocks from this year’s lows, the AI theme, plentiful global liquidity and expansionary G7 fiscal policy . . .

The enthusiasm of investors is becoming increasingly (and perhaps excessively) evident. Each new event is being interpreted more positively than would be warranted had global liquidity conditions not been so increasingly buoyant ...

The investment backdrop in recent years has benefited from the seemingly endless amount of liquidity, resulting in almost all risk assets recording significant price inflation, leaving fewer appealing opportunities.

Investors have thrown caution to the wind and embraced pro-growth monetary and fiscal policies, while discounting any of the upside inflation or other policy risks, such as several higher U.S. tariff rates.

After months of shifting dates and changing tariff rates, the U.S. administration has been able to nearly conclude a few trade deals. There are a lot more to go, including deals with our most important trading partners, namely China, Canada, and Mexico.

The S&P 500 and NASDAQ yet again hit new record highs last week. The U.S. economy is still holding up well despite higher tariffs and related turbulence. A resumption of growth is likely in 2026 after some softness over the second half of this year. All bets are off if the tariff war escalates.

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