“US Economic Policy: Teetering on an Inflationary Equilibrium”, Brian Pellegrini, Intertemporal Economics

The IRF is joined by Brian Pellegrini, the Founder of Intertemporal Economics. ----more---- In this podcast Brian Pellegrini discusses the political factors that influence the recurring problems relating to Congress passing legislation to raise the US debt ceiling. Brian reflects on the various fiscal, monetary and macro-prudential policy dilemmas associated with the recent spike in inflationary pressures, the impact of higher interest rates and the consequent financial instability in the financial sector due, in part, to several regional bank failures.   Given the potential problems in the bond market, he expects the Fed to take steps towards a policy of yield curve control and to start acting as the market maker of first resort. Brian also explains why he predicts that the US economy will be in the midst of another inflationary cycle by mid-2024.   As a result, Brian expects the US stock market to follow a winding path. He foresees a strong outperformance by financials in the next 3 – 6 months, as inflationary fears fall on false hopes of a lasting return to a low inflation environment. He thinks that the year ahead will therefore be a period of volatility with a strong divergence between the performance of different stock market sectors.   In addition, Brian anticipates that there will be a greater degree of cooperation amongst the major central banks in the near term that would have some implications for the US dollar. In the longer term, he sees two major political challenges that will have an influence on the US dollar: i) demographic trends and their prospective impact on the US labour market; ii) the potential global division between the West and other parts of the world in the East and the Global South.   Brian Pellegrini is the Founder of Intertemporal Economics and the firm’s Senior Analyst. Brian founded Intertemporal Economics in 2018, previously he worked with Bernard Connolly as a senior analyst at Connolly Insight, where he specialized in Geopolitical Event risk, Monetary Policy, Labour Markets and Energy. Prior to Connolly Insight, Brian was employed in various positions across Wall Street, including working with high-growth technology firms raising capital, structuring options trades and valuing asset-backed securities. Brian has an MBA from Columbia University, a Master of Science in Finance from North-Eastern University and a Bachelor of Science in Computer Science from Columbia University. He is also a CFA charter holder.   Intertemporal Economics uses an in-depth analytical framework, which is based on microeconomic foundations. This allows an understanding of endogenous factors and patterns of human behaviour that cannot be analysed using quantitative techniques alone. The firm’s research focuses on topics affecting economics, interest rates and asset prices in developed and emerging markets.