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Payne's Perspective: December 20, 2021: Avoid Self-Inflected Wounds

By Charles Payne CEO & Principal Analyst

Was it a failure to communicate, or did the audience hear what they wanted? Or was it just pure brilliance from Federal Reserve Chairman Powell during the question-and-answer period that gave everyone what they were looking for? I’m reluctant to say it was brilliance, but he certainly checked all the boxes.

Each Federal Open Market Committee (FOMC) press conference ends with this statement:
To conclude, we understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public mission. We at the Fed will do everything we can to complete the recovery in employment and achieve our price stability goal.

The public mission implies the Fed is working for all Americans, including those not invested in the stock market or own other assets like a home or old baseball cards. All the money gushing into the economy does reach everyone as the Fed is buying government debt, and those funds are used to send out stimulus checks and other payments ostensibly designed to help. 

Those funds only add to the wealth effect when they are immediately spent (I call it the ‘trickle up’ as this is how rich people get and stay rich). Still, they add to the inflation crisis when overdone, which means there is little shared prosperity but always shared misery – especially for lower-income households. 

My main mission is to make sure everyone owns stocks and hard assets so that they can ride this wave as owners rather than only as spenders. That mission got harder last week – more on that later - let’s delve into the conundrum of markets.

Charles Payne
Wall Street Strategies


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