Doug Kass: My 15 Surprises for 2022

President Biden turns into sufficiently incapacitated such that President Harris turns into the primary feminine President of the United States. She instantly turns into, in impact, a lame duck president and has no vital profitable legislative accomplishments over the subsequent 12 months. Leaked tales of abusive mood tantrums within the Oval Office make headlines.

Both Vladimir Putin and Xi Jinping instantly put Harris to the take a look at with a sequence of international coverage crises – and he or she proves to be less than the duty.

The November mid-term elections lead to a landslide for the Republicans, who take the Senate and win a sizeable majority within the House of Representatives.

Speaker Pelosi retires from Congress.

Meanwhile, Donald Trump additionally turns into sick and broadcasts he won’t run for President in 2024.

This creates a large open area for the nomination in each events.

In mid-2022, Republican Nikki Haley broadcasts that she’s going to run for president and assumes the (defacto) mantle of her occasion’s management and takes a robust lead for the 2024 Republican Presidential nomination.

Leading Democrats converse out and encourage Hilary Clinton to run, once more. Though she stays publicly uncommitted, she is clearly very , and, in line with quite a few sources is severely contemplating a run.

Privately, the previous president, Donald Trump, lobbies, postures and grooms his daughter, Ivanka, to run for President.

Almost in a single day, when his/her political ambition is revealed, Ivanka Trump takes a big lead over Haley as her father’s supporters shortly return in power.

In a speedy response to the Ivanka Trump declaration, Clinton broadcasts her plan to hunt the Democratic Presidential nomination.

The stage is thus set for one other Trump/Clinton Presidential contest in 2024!

Despite accelerated tapering and an try and sign gradual and regular price hikes, inflation accelerates effectively past expectations. By February inflation is operating shut to eight%. Though comparisons are robust, inflation stays effectively above consensus expectations (sticking at above 5% this summer season).

ESG investing, the entire reopening of the worldwide financial system and rising geopolitical tensions sends oil to over $110 a barrel.

While Omicron proves far much less virulent than initially feared, enterprise closures put in place and uncertainties serve to exacerbate the availability chain dislocations seen in 2021. The continued logistical mess reinforces extra (price push) inflation and mounting inflationary expectations.

The U.S. labor scarcity intensifies and wages develop +6%. The shift from “goods to services” demand submit Covid truly causes extra inflation as, surprisingly, service costs speed up throughout the board.

“Slugflation” (sluggish progress and sustained inflation), a distant cousin to “stagflation,” turns into a characteristic and generally used time period in 2022.

As rates of interest improve (within the U.S. and in Europe), the rising greater debt burdens within the monetary system – which have clearly institutionalized instability – result in a brand new regime of fairness market volatility not often seen in fashionable funding historical past. Daily strikes within the S&P Index of two%-3% turn into commonplace.

The housing scarcity worsens, as labor shortages restrict house building and houses for lease corporations purchase no matter provide they discover. Home costs go up by one other 15%. Eventually, the excessive costs for every part will start to affect affordability and demand, as shoppers cannot afford to keep up consumption when rates of interest ratchet greater later within the 12 months.

The Fed is left in an inconceivable place of lastly realizing it must get “serious” about inflation right into a slowing financial system.

Powell realizes he ought to have let Lael Brainard have the job.

Treasury Secretary Yellen, recognizing that inflation is materially widening the wealth and earnings hole (by appearing as a regressive tax) encourages Powell to do “whatever it takes” to cease inflation.

Whip Inflation Now (WIN) buttons are distributed nationally.

Powell finally ends up extra Volcker-like than anybody predicted. The Fed Chair turns very hawkish and focuses on inflation – not jobs or shares. But it’s too late and the financial pivot fails to materially cut back an elevated degree inflation as years of financial excesses will not be simply reversed.

In 2022 we study that there isn’t a financial coverage that treatments the inflationary affect of continued world provide chain and logistical disruptions and imbalances.