"The risk is the Fed doesn’t overshoot 2% inflation by a small margin, but by a large amount.”
"Low interest rate cannot help the poor who don’t own real and financial assets. They need wage increases."  


Astute long-term market observer Komal Sri-Kumar (President of Sri-Kumar Global Strategies, Senior Fellow at the Milken Institute) returns to Kopi Time to share his concerns on economic overheating, inflation risks, Fed credibility, housing market, and rising inequality. Sri switched from being a long-term US fixed income bull to a bear earlier this year, expecting 2%+ 10-yr US bond yield by the end of the year. He is not only worried about the knock-on impact of prolonged monetary easing on inflation and financial stability in the US, but the likely destabilising global implications through the liquidity and exchange rate channels. He is short duration, neutral to bearish USD, long gold, and long commodities (food, energy, metals). He has no conviction on equities, especially given the high valuations and the risk of Fed misstep. 

"The risk is the Fed doesn&rsquo;t overshoot 2% inflation by a small margin, but by a large amount.&rdquo; "Low&nbsp;interest rate cannot help the poor who don&rsquo;t own real and financial assets. They need wage&nbsp;increases." &nbsp;
 Astute&nbsp;long-term market observer Komal Sri-Kumar (President of&nbsp;Sri-Kumar Global Strategies, Senior Fellow at the Milken Institute)&nbsp;returns to Kopi Time to share his concerns on economic overheating, inflation risks, Fed credibility, housing market, and rising inequality. Sri switched from being a long-term US fixed income bull&nbsp;to a bear earlier this year,&nbsp;expecting 2%+ 10-yr US bond yield by the end of the year. He is not only worried about the knock-on impact of prolonged monetary easing on inflation and financial&nbsp;stability in the US, but the&nbsp;likely destabilising global implications&nbsp;through the&nbsp;liquidity and&nbsp;exchange rate channels. He is short duration,&nbsp;neutral to bearish USD,&nbsp;long&nbsp;gold, and long commodities (food, energy, metals). He has no conviction on equities,&nbsp;especially given the high valuations and the risk of Fed misstep.&nbsp;

Kopi time is a podcast series on insights from markets and economies around the world, hosted by Taimur Baig, Ph.D., Chief Economist of DBS Bank Ltd.

Kopi time is a podcast series on insights from markets and economies around the world, hosted by Taimur Baig, Ph.D., Chief Economist of DBS Bank Ltd.

Kopi Time podcast with Taimur Baig

DBS Economics & Strategy

Kopi Time E058: Komal Sri-Kumar on Fed policy, inflation, and asset markets

https://api.omny.fm/orgs/f6ad7490-363d-4f1f-8948-abf300412a6f/clips/05e2a950-4ebd-4a5c-90af-ad5c005f4e15/transcript