The Fed Has Lost Control - Juliette Declercq and Jimmy Connor

Juliette Declercq is the founder of JDI Research and has over 20 years of experience in trading and macroeconomics. In addition to economics, Jimmy and Juliette also discuss her favorite place to ski in France and what her favorite sport is (you'll never guess). I hope you enjoy this chat! To learn more check out her website below... https://www.jdiresearch.com/about Summary The U.S. economy remains strong, with growth around 2-3%. China is in a downturn despite government stimulus. Europe, especially Germany and France, is experiencing economic struggles. U.S. Economic Outlook: 2024 was buoyed by strong wage growth and reduced inflation, leading to increased purchasing power. 2025 is expected to face a slowdown as wage growth normalizes and inflationary tailwinds subside. Central Bank Challenges: The Federal Reserve (Fed) is perceived to have lost control over financial conditions. Rising risk premiums are pushing up long-term interest rates, complicating the Fed's policy effectiveness. Recession Risks: Juliette anticipates a significant economic slowdown in the first half of 2025, with a potential recession driven by weakening labor markets and reduced consumer purchasing power. Interest Rates and Yield Curve: Long-term rates, such as the 10-year yield, are rising due to risk premiums rather than economic strength. This dynamic could force the Fed to cut rates further than expected. Impact of Fiscal Policies: Increased tariffs and fiscal dominance under a potential Trump administration could create inflationary pressures in the long term but recessionary effects in the short term. Global Power Dynamics: The U.S. retains significant influence as a key consumer market. Policies like tariffs aim to strengthen domestic production and maintain economic dominance. Currency and Market Trends: The U.S. dollar remains strong, bolstered by economic "exceptionalism" and technology dominance. Euro and Yuan are expected to weaken further. Technological and Resource Frontiers: The U.S., particularly companies like Tesla, is poised to dominate future technologies in AI, quantum computing, and renewable energy. Strategic interests extend to areas rich in resources, like Greenland and Canada. Market Strategy: Juliette suggests being cautious about broad equity markets like the S&P and NASDAQ due to economic pressures. She advocates for investments in high-growth sectors, specifically Tesla, leveraging the AI and energy revolutions. WAIVER & DISCLAIMER If you register for this webinar/interview you agree to the following: This webinar is provided for information purposes only. All opinions expressed by the individuals in this webinar/interview are solely the individuals’ opinions and neither reflect the opinions, nor are made on behalf of, Bloor Street Capital Inc. Presenters will not be providing legal or financial advice to any webinar participants or any person watching a recorded version of the webinar. The investing ideas and strategies discussed on this webinar/interview are not recommendations to buy or sell any security and are not intended to provide any investment advise of any kind, but are made available solely for educational and informational purposes. Investments or strategies mentioned in this webinar/interview may not be suitable for your particular investment objectives, financial situation, or needs. You should be aware of the real risk of loss in following any investment strategy discussed in this webinar/interview. All webinar participants or viewers of a recorded version of this webinar should obtain independent legal and financial advice. All webinar participants accept and grant permission to Bloor Street Capital Inc. and its representatives in connection with such recording. The information contained in this webinar/interview is current as of January, 2025, the date of this webinar/interview, unless otherwise indicated, and is provided for information purposes.