What we’re reading (8/17)
“Powell’s Last Stand: His Legacy And The Fed’s Independence Are On The Line At Jackson Hole” (Barron’s). “Federal Reserve Chair Jerome Powell will take the stage next Friday at the Fed’s annual Jackson Hole Economic Symposium to deliver what may be the defining speech of his career. The speech won’t be lengthy— last year’s version clocked in at just over 15 minutes—but with his term as chair ending next May and the Fed’s performance under attack by the Trump administration, Powell may see Jackson Hole as his last or, at least, his best chance to cement his legacy and make the case for the central bank’s independence.”
“Strong Crop Of Earnings Eases Investors’ Economic Concerns” (Wall Street Journal). “The job market is cooling. Tariff rates are rising. But American companies still seem to be doing just fine. With the latest earnings season nearly done, top- and bottom-line results from companies in the S&P 500 are handily beating expectations that had been lowered after President Trump announced sweeping duties on imports in April. Profits are expected to have risen around 12% in the second quarter from a year earlier, according to FactSet, far ahead of the 5% growth analysts predicted in early July. While much of that earnings growth has been driven by tech companies, corporate chiefs also have sounded more optimistic about the economy than they did in the spring. Earnings calls including the word “recession” have plummeted 84%, according to AlphaSense.”
“Inflation Alarm Bells Went Off Again And Prices Are Rising. Just How Bad Is It Going To Get?” (MarketWatch). “The biggest increase in wholesale prices in three and a half years stunned Wall Street, but is tariff-related inflation really set to soar? The proof is far from ironclad. The latest pair of inflation reports, to be sure, were not reassuring. A key measure of consumer prices showed the largest advance in six months and pushed the yearly rate back above 3%. Just six months ago — before the U.S. trade wars — the rate of inflation was widely expected to slow this year to close to the Federal Reserve’s 2% goal. Not anymore.”
“Why Hands-Off Investing Pays Off” (New York Times). “[A] new study of investor behavior by Morningstar…found that, on average, the actual returns of fund investors were significantly less than the posted market returns, a discrepancy explained by poor trading decisions — buying when the market was high and selling when prices were low. Over extended periods — say, 30 years — this drag on returns produces chilling results: a reduction in the money in an average investor’s portfolio of more than 18 percent, according to Morningstar calculations performed at my request.”
“1910: The Year the Modern World Lost Its Mind” (Derek Thompson). “When we hear about technological change and social crisis in the 21st century, it is easy to imagine that we are living through a special period of history. But many eras have grappled with the problems that seem to uniquely plague our own. The beginning of the 20th century was a period of speed and technological splendor (the automobile! the airplane! the bicycle!), shattered nerves, mass anxiety, and a widespread sense that the world had been forever knocked off its historical axis: a familiar stew of ideas.”
