Investing for Today’s Pre-Inflationary Regime

The policymakers are laying the verbal groundwork for when they have to do something really dramatic to fight inflation, which they’ll probably have to do in the next six to 12 months. Of course, when the time comes, the Fed won’t come right out and say, “Inflation is here.” They’ll couch it in carefully selected Fed terms, like “we’re focusing on yield capping” or “we’re concerned about yields rising in a way that is problematic.” In the meantime, we are faced with a market filled with extreme valuations. And as an investor, you have to dance to the tune the devil’s playing.