January 16, 2025
By Peter Bower
The inflation rate has gotten sticky at about where the Bull expected it to level off. The Bull stated this well over a year ago and has referenced it in subsequent blogs. There were many reasons for this prediction, including a reversal in the globalization of trade, aging populations around the world, increasing competition for resources, as well as the need to increase defense spending. All these factors add to inflationary pressures.
Consequently, longer-term interest rates have been rising. Even so, historically these rates are not high. They are now finally normalizing after an unusually long period of being unusually low. Both the bond and stock market are getting used to this. After all, we have had great markets with higher interest rates.
Higher interest rates may also indicate that demand for money is good. That usually means that our economy is strong and perhaps even getting stronger. This is certainly something to celebrate. The Bull and his partners have been redeploying the cash they raised before the sell-off late last year and early this one. We are pleased with the bargains we have been able to pick up. Be optimistic and stay steady my friends.
-The Lonely Bull
