A Crossroad In The Post-Covid Economic Era

Since the Federal Reserve initiated an historic tightening campaign 19 months ago, inflation has declined to the central bank's target rate and GDP growth has remained stronger than expected.

A soft landing -- or no landing at all -- is possible. As the post-Covid period of anomalies approaches an important crossroad and a recession still hangs in the balance, a lot is riding on FOMC policy decisions now.

Economist Fritz Meyer reviews the latest data on fundamentals that drive the economy and financial markets in this class, and he examines as the central tendency forecast for fed funds as of Nov. 1, as well as changes in the language following the monetary policy release issued after the Nov 1 meeting.

Current Fundamentals

• The Atlanta Federal Reserve Bank's GDPNow algorithm, as of Oct.2, is predicting gross domestic product growth in the current quarter will be 4.9% for Q3 2023. Meanwhile, the New York Fed staff's "Nowcast": stands at 2.1% for 2023:Q3. Neither predicts a recession.

• The number of job openings increased to 9.6 million in August, BLS reported Oct.5, much more than the 8.8 million expected by Wall Street. If demand for workers stays this strong, a recession is unlikely because the number of workers earning income and spending will continue to rise as openings are filled in the weeks ahead.

• Mortgage and consumer loan rates are at a 20-year high, and stock p/e ratios are fully valued. The LEI declined for the 19th month in a row in September and the Fed funds/10-year yield curve has been severely inverted -- at levels only seen previously preceding a recession -- all year.  

Participants come away from this class with a plain-English explanation of data-driven analysis of U.S. fundamentals, including the manufacturing and service PMIs, PCE deflator index, and 12-month forward-looking expected earnings valuations, as well as a refresher on the long-term U.S. debt.    

Objectives of Fritz Meyer's monthly classes for investment advisors include:

● contextualizing current financial economic metrics versus the long-term historical record

● providing knowledge needed to formulate and explain the outlook concisely 

● explaining Federal Reserve actions and outlook

● implementing a prudent discipline for fiduciaries managing portfolios ERISA assets

● analyzing the latest financial data, including:

● M2 is down slightly and still very high relative to its history

● last week’s Fed meet and policy pronouncements

● new-job formation in October declined but still strong

● job openings still far exceed job seekers

● savings rate plunged

● strong personal spending fueled by savings

● consumer income and spending

● DPI and savings

● household balance sheets strong

● PCED and CPI

● savings rate

● retail sales

● housing starts nosedive

● latest consensus WSJ Survey

● latest GDPNow forecast for Q3 2022 GDP

● LEI declined six straight months through Sept.

● Fed funds/10-year yield curve

● labor participation rate

● S&P 500 earnings

● manufacturing and services PMI

● auto sales

● S&P 500 expected vs current and historical p/e

● the Fed’s stock valuation mode

● the best approach to investing

Fritz Meyer, an independent economist, has taught on A4A monthly since March 2011. His monthly classes averaged a rating of 9.7 (out of 10) annually year after year. Before teaching on A4A, Fritz was senior strategist at one of the world's largest investment companies for over a decade. Ratings by participants in Fritz Meyer's monthly CE webinars for over decade have averaged 9.7 (out of 10). A former senior strategist at one of the world's largest investment companies for over a decade, Fritz is an independent economist.

This monthly course is eligibile for one hour of CE credit towards the CIMA^® and CPWA^® certifications, CFP^® CE and PACE credit toward the CLU^® and ChFC^® designations.

Who Should Attend: Financial Advisors, CFPs, EAs, CFAs, CPA/PFSs, CIMAs, CLUs and ChFCs.
Cost: There is no fee to attend this course if you are a member of Advisors4Advisors ($60/Qtr).
CPE credit: 1 hour, in the Economics field of study
Prerequisites: None
Advanced Preparation: None
Course Level: Update
Course Delivery Method: Group Internet-Based
Program Policies: For more information regarding administrative policies such as refund, cancellation and complaint, please email This email address is being protected from spambots. You need JavaScript enabled to view it..

Advisors4Advisors is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org. Advisors4Advisors is also approved as a continuing education sponsor by IWI, which administers the CIMA^® and CPWA^® designations, and CFP Board of Standards, which licenses the designation for CFP^® professionals.