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Fed Up with the Fed

Oct 1, 2022

2 min read


VOLUME 14 | ISSUE 4


These are tough times for a portfolio manager. A current most frequently asked question “Is there any good news you can give us?” Honestly, it’s very hard to find.


All short-term trends, whether economic, political, financial, are moving against investors—war, global crop failures, supply chain, all fuel, persistently high inflation. The Federal Reserve Bank is bound and determined to drain the monetary swamp and force economic pain on all of us. There is NOT much to like about it. And markets are doing their best to fully reflect the perfect storm.


Federal Reserve Chairman Powell is a very accomplished individual, and I respect his life’s achievements. However, I have a very different view than the Chairman of our current plague of inflation. A year ago, the common Wall Street wisdom on inflation was that it was “transitory” and would fade as the global economy moved past the worst of the pandemic. My colleague Adam and I never bought into this argument.


Inflation is being driven by many interrelated and complex forces and it has not been transitory.

Therefore, the Federal Reserve has decided they need to inflict pain on all of us in the form of a recession. I have news for the monetary oracles – the big R has been here for six months! I’m scratching my head. I’m actually more expressive in my thoughts when in appropriate company. Though markets can be very mysterious, they will very accurately reflect mistaken policy.


I don’t believe more pain is required. You don’t slam the brakes on a speeding Ferrari without something bad happening.


I have saved the good news for last:

  1. Inflation in key sectors has moderated.

  2. The War in Ukraine is proving a disaster for the key perpetrator as thousands of Russians flee their homeland to avoid conscription.

  3. The “much anticipated” recession has proven to be here since spring. The worst may be behind us unless the Fed overshoots? Unfortunately, they have a history of that.

  4. More financial spokespersons are expressing a growing disagreement with Federal Reserve Policy. 5. Unemployment remains very low, fueling a resilient consumer.


Aristotle wisely advised, “moderation in all things…” We need some of that now.

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4101 Lake Boone Trail, Suite 208
Raleigh, NC 27607

919.571.4382

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