The death of the ‘punchbowl’ metaphor

DON’T expect the year-long rally in risky assets to be undermined any time soon by the Federal Reserve becoming concerned about inflation.

The old metaphor – that the Fed’s job is to take away the punchbowl just when the party starts getting good – just doesn’t apply in the current circumstances. That’s not to say inflation isn’t a threat in the medium term – it is virtually a promise.