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Greg Valliere: Inflation Fears Could Delay Biden's Tax, Spending Plan

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Greg Valliere, chief U.S. policy strategist for AGF Investments, believes the “growing public anxiety over inflation will become an obstacle for proponents of more federal spending,” and that Sen. Joe Manchin, D-W.Va., “may delay consideration of the massive $1.75 trillion social spending bill; he wants to wait until inflation subsides.”

A social spending bill, including tax hikes on high earners, “could move in the House soon, but progress will be very slow in the Senate because of Manchin’s reservations and Joe Biden’s clear loss of political capital,” Valliere told ThinkAdvisor Monday.

Washington-based Valliere is a go-to resource on interpreting the nexus between Washington and Wall Street. We caught up with him Monday to pick his brain on the trends of the day and how he spends his down time.

1. What market indicator, industry statistic, regulatory change or advisor trend are you watching most closely right now and why?

I look at the Treasury 10-year bond more than any indicator, and it’s been eerily tranquil — yields have not soared, as you might expect with inflation taking off. This tells me that the economy may only grow moderately in the next few months.

2. How has it been changing recently (2021) and how do you expect it to change (2022)?

I have to think that yields eventually will rise, with the 10-year hitting 2% by summer.

3. What would you suggest advisors do now or consider doing in the future about it?

I think a gradually rising bond yield is nothing to worry about — the Fed has telegraphed its intentions. I always watch the Fed press conferences after FOMC meetings — invaluable information.

4. Who or what critical source of information do you track, or follow online, to keep up with this or other trends?

I look carefully at most of the big economic reports — the jobs report is the most crucial but inflation data is important also.

5. Are you changing any of your work habits at this stage of the pandemic? Why/why not?

I really haven’t changed work habits. I devour several publications — Wash Post, WSJ, NYT, Politico, The Hill, Bloomberg, Reuters, Roll Call, CNBC, etc. I don’t always agree with the WSJ editorial page, but their Washington reporters are excellent. Always asking what’s relevant for investors.

6. What’s your biggest hobby and what was the last event/activity you did related to it? 

Biggest hobby during these terrible two years is running — it clears the mind.

Love to sweat, what can I say?

7. How about your latest community/charitable activity/event/cause?

I’m a big supporter of So Others Might Eat (SOME).

8. What book are you reading now and why?

Nothing related to work. Just got the new book from Amor Towles, who wrote the sublime “Gentleman in Moscow.”

9. Any special holiday plan, activity or focus you’d like to share as we near year-end? Or a New Year’s resolution that you’ve decided on?

We’re headed for Europe, a tradition, for the holidays. Lugano, Torino, Paris, time to relax!! Life is short. No resolutions.

10. Any other update/fact about you or piece of advice/wisdom you’d like to share with our advisor audience?

Stay curious, feed your head. I’m always looking for new ideas …

Pictured: Greg Valliere, chief U.S. policy strategist, AGF Investments