The Mona Lisa Economy

If you’ve been confused by recent news and data on the economy and markets, you’re not alone.

A recent article in the Economist[1] had an interesting comparison to the Mona Lisa. The main point is that it is hard to know what the Mona Lisa is thinking, whether she is smiling or not.  She was painted that way on purpose.  Likewise, the economy seems somewhat enigmatic these days–it is a mix of good things and troubling things and some things that are hard to explain.  For example: 

• Is employment strong or weak?  Which statistics tell the real story? 
• Where did all those millions of missing workers go, and why? 
• Is inflation stubbornly high, or moderating? 
• When is the Fed going to stop tightening?  Have interest rates peaked? 
• How will regional banks cope with this new and more challenging environment? 
• What is going to happen in real estate markets? 
• Are we headed for a recession? 

Questions, questions.  We are living in interesting times; unlike anything I can remember in the decades I have been doing this.  

But it is comforting to have a diversified strategy, since we know that we simply can’t predict what is coming next and we are often surprised by good outcomes despite the dark clouds on the horizon.  Sometimes the best markets come at what seem to be the worst times.   

1. The Economist. “How to Explain the Puzzle of the World Economy.” The Economist, 20 Apr. 2023, www.economist.com/finance-and-economics/2023/04/17/how-to-explain-the-puzzle-of-the-world-economy. 

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