The United States concluded its 60th quadrennial presidential election, electing a Republican as the nation's next commander and chief and 47th President to serve in the White House. In addition, the election results turned the US Senate over to the Republicans after four years of Democrat control. With another layer of uncertainty related to elections removed from markets, market prices are adjusting to the anticipated policies of the new administration.

Higher interest rates in the US may be starting to countercyclically affect outside economies because of the strong demand for US dollars. When financial markets demand fewer non-US dollar assets, all those foreign exchange reserves go home to roost, increasing the odds that those international economies will experience renewed inflation threats.

The road out of the pandemic has been a rocky ride in terms of monetary policy and investment markets. Public equity valuations and fixed coupon bonds have recently been experiencing the effect of a capital rate adjustment.

The Taylor rule is a policy tool used in monetary policy. It consists of three different components to help guide interest rate decisions in the economy. The first expression represents the natural rate of interest that should exist in harmonious equilibrium.

Recent experience in market investments has moved down from the highs as a new economic reality takes over. Material shifts affecting economic activity are not limited to but include the Ukrainian crisis and record inflation that warrants a more restrictive role of money in the marketplace.

Stocks pulled back in January as investors prepared for the interest rate takeoff. As a result, US large-caps rolled backward to end with losses in the mid-single-digits. Small-cap losses were even more significant in size.

The Santa Clause rally happened, and US stock indexes pushed higher to close 2021 with impressive gains. In summary, and according to public data given out by S&P Global, large-cap stocks returned more than small-cap stocks in 2021, and small-cap beat out mid-cap.

Big media has refocused coverage on the new coronavirus variant. Research in the pharmaceutical industry is already underway to obtain the gene sequence of Omicron. As a result, vaccines and booster shots will likely soon come with an antibody to act as a line of defense against the variant. Still, investors sold the news as renewed shutdowns and restrictions became prominent concerns. However, President Biden was quick to discourage shutdowns as an acceptable policy response to Omicron.

The economy's real growth supposedly slowed down to a tepid two percent annualized rate in the third quarter. However, the markets thought the annualized rate would come in above two and a half percent so, when it didn't, investors took action, and bond market yields reacted.

Marketplace valuations have reached new heights, and interest rates have revisited lows. So naturally, it is normal to experience more uneasiness and weariness around the limits of financial returns, creating heightened awareness in all those involved. Indeed, anything vaguely connected with the delta-variant, inflation, credit defaults, government deadlocks, and challenging labor markets can captivate the public right now.

A significant sum of US dollars has gone into global market operations since the last round of stimulus efforts began. Specifically, the M2 money stock increased to over 20 trillion US dollars from the 15.5 trillion dollars in place less than twenty four months ago.

Another fascinating market dislocation is happening in the government debt markets of the financial economy. This supply and demand imbalance can affect prices on almost every asset, and is currently forcing long-term interest rates back down.

In little time, the temporary and deflationary change that COVID-19 brought reversed into another leg up for the business cycle and inflation. Trillions of dollars went into the economy to keep expenditures upright through the pandemic.

As of late, the stock market has experienced a meaningful style rotation. Throughout much of the previous five months, the returns on the value style have accelerated while the returns on the growth style have stalled out.

The US stands at a critical juncture concerning the future use of the deficit. It can support popular social programs that add less direct productivity to the economy or invest in projects that can create immediate jobs.

Special Purpose Acquisition Companies (SPACs) have become a popular topic for discussion in the mainstream conversation of finance in recent months. The primary purpose of a SPAC is to make a public offering of a private company.

People need currency to conduct financial transactions in the economy. The demand function for currency says that lesser quantities of currency are demanded when interest rates are high, and larger quantities are in demand when rates are low.

An unusual amount of stock speculation has taken place in a handful of distressed stocks as of late. One such stock is GameStop, a video game retailer, which has become a subject of popular conversation and a source of hedge fund pain.

A historic year has finally come to an end and this new year will help usher in a wave of optimism. 2020 was undoubtedly a challenging year for all, but societies around the world were able to display resilience and prove that human ingenuity is capable of solving complex problems.