Wake me when it’s Over

Are we going into another round of political brinksmanship?

It sure looks like it. With Congress divided and the debt-ceiling deadline, government funding deadline, Fed taper target, and new Fed Chair decision all coming due, it seems like we’re headed for volatile times. To be sure, these are important issues: monetary policy helps determine interest rates, which in turn are key to the value to all financial assets. Government spending constitutes over 20% of the economy; shutting it off suddenly would be highly disruptive. And if we don’t expand the debt ceiling, the US could default–a disastrous possibility that no one really wants to contemplate.

But we’ve seen this movie before, and it’s a snoozer. The difference between Larry Summers and Janet Yellen is one of style, not substance. The institution of the Fed Chair is far bigger than any man or woman who sits there. Fed policy is dependent on the economy, which is gradually strengthening. And fiscal and financial policy have been in flux ever since the Republicans took the House in 2010. Divided government is something Americans do–like eating hot dogs or buying junk food. It may not be good for us, but it won’t kill us right away, either.

So don’t get all lathered up over the latest Congressional brouhaha. Chances are, it’s just some politician hoping for a headline.

Douglas R. Tengdin, CFA

Chief Investment Officer

By | 2013-09-03T09:06:12+00:00 September 3rd, 2013|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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