We're not going to get a big inflation surge here, says Ironsides' Barry Knapp

Monetary Policy & Inflation Outlook - The independence of the Federal Reserve is critical for both the current and future chairs [1] - The market is pricing in a full point (100 basis points) of rate cuts by the Fed this year [1] - Inflation is primarily a fiscal and monetary phenomenon, not driven by tariffs [3] - The industry anticipates soft growth numbers will lead the Fed to ease policy, potentially finding themselves behind the curve in September [6][10] Fiscal Policy & Economic Conditions - Government spending growth has slowed significantly, from a 45% increase in the first six months of fiscal year 2021 to a 5% increase currently [4] - Money supply growth has also slowed, from 27% to 4%, compared to a 50-year average of 6-7% [5] - The industry does not expect a significant inflation surge due to the changes in fiscal and monetary policy [6] Treasury Market & Investment Strategy - The industry suggests underweighting the back end of the Treasury market, maintaining a 70% stocks, 30% bonds allocation [7] - There is pressure on the back end of the curve due to factors such as the JGB market, slowing of QE in Japan, and spending out of Germany [8] - The two-year to five-year part of the Treasury curve may represent a good investment opportunity if weak economic data emerges [9]