Doll's Deliberations

Doll’s Deliberations this week summarizes some short-term expectations and some longer-term issues.



1. Stocks and bonds have both recorded three negative quarters in a row. This has not happened in nearly 50 years.

2. Central banks underestimated the level of interest rates required to cool economic growth and curb inflation pressures.

3. Money (M2) growth peaked at over 25% in late 2020 and is now negative.

4. The U.S. dollar has appreciated 25% since the beginning of 2021.

5. 57% of large cap U.S. managers outperformed for the first nine months of the year, the largest percentage in 15 years.


Inflation was “0-2% forever.” It rose quickly and peaked mid-year at 8-9%. We expect inflation will continue to fall irregularly to a still unacceptable 4-5% (on an annualized basis) by year-end. Inflation is declining due to:

1. The Fed raising rates to slow economic growth

2. Significant slowing in money growth

3. Dollar strength

4. Lower commodity prices

5. Some let-up in supply chain disruption