Commentary

The Capital Markets Path Remains Murky
Doll’s Deliberations

The Capital Markets Path Remains Murky

Global financial markets continue to be whipsawed by shifting threats and demands from the new U.S. administration. Generally, investors are still downplaying the threats and focusing on what is still a choppy, but modestly positive, risk-on backdrop. Monetary conditions are not restrictive in the major developed market economies, and policy rates are still being lowered in some of the smaller economies. Global economic activity is on track to improve.

02/24/2025
The Tariff Discussion Continues
Doll’s Deliberations

The Tariff Discussion Continues

The Fed’s primary stated goal is to return inflation to 2%. It is failing, and with hindsight, the 100 basis points (bps) in rate cuts since September were a mistake. U.S. monetary conditions were never restrictive, despite Chair Powell’s repeated assertions. Rate cuts have only further stoked asset price inflation and provided additional stimulus to an already warm economy, putting a floor under inflation.

02/18/2025
AI Competition and a Possible Trade War Keep Things Interesting
Doll’s Deliberations

AI Competition and a Possible Trade War Keep Things Interesting

When a stock is assumed to have a monopoly and enjoys abnormally high profit margins (e.g., Nvidia), the impact of something challenging that view can be huge, especially if the stock is priced for near perfection. With the discovery of DeepSeek and the jolt it had on the established AI leaders, we got a taste of that phenomenon last week.

02/03/2025
Fewer tailwinds/more headwinds
Doll’s Deliberations

Fewer tailwinds/more headwinds

Rising inflation and interest rates that led to fears of a hard landing through much of 2022 and 2023 have long dissipated. The combination of falling interest rates and continued economic growth have, at least in the past, been associated with strong equity returns.

01/13/2025
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