Deutsche Bank's Chief US Fixed Income Economist Joe Lavorgna joins the panel for this conversation. Following are excerpts.
What will the message be from the Fed?
That the economy has some downside risk says LaVorgna, but monetary policy- makers are worried about inflation. That’s the worst possible news for equity investors because they’re getting hurt on growth and inflation risk. I don’t think they’re going to greet that message well.
How will events in Europe play in our markets?
I think we will get a repeat a few weeks ago, says LaVorgna. The Chairman is really in a bind, because he either has to talk the market off the ledge, or actually ease rates. The price action will probably get worse if the Fed disappoints the market.
What do you make of the dollar comments made by the Chinese?
It’s sort of like this is the perfect storm, everything is moving against the American economy, says LaVorgna.
Except the exports…
I do believe the weaker dollar will help exports, adds LaVorgna. And I don’t want to underestimate the dollar and the strong global economy to help America grow. I still believe.. that we’re going to get through this current environment without recession.