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<ul class="summary-list"><li>Most cryptocurrencies are 'garbage,' said Guggenheim Partners' CIO <keyword id="11899354" type="UNKNOWN" weightage="60" keywordseo="scott-minerd" source="Orion">Scott Minerd</keyword> on Tuesday. </li><li>He told Bloomberg the market will need to see which digital currencies will keep going, similar to Amazon's survival of the dot-com bust. </li></ul>The bulk of digital currencies will fail, according to Guggenheim Partner's Scott Minerd, who also said now is not the time to bet against <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a>'s recent rise. "Seventy percent of the coins are garbage and will go away," <a href="https://www.bloomberg.com/news/articles/2021-10-19/some-70-of-cryptocurrencies-garbage-guggenheim-s-minerd-says?sref=GUP2BhaG">Minerd told Bloomberg Television in an interview</a> on Tuesday, noting that he's not bullish on the cryptocurrency space, even though many challenge him on his stance. "The question is, just like the internet bubble, which of the companies, survive. Will <a href="https://markets.businessinsider.com/stocks/amzn-stock">Amazon</a> be the big winner or will Pets.com be the big winner?," he said. Minerd made his comments on the same day of the <a href="https://markets.businessinsider.com/news/currencies/proshares-bitcoin-etf-bito-first-futures-fund-nyse-sec-approval-2021-10">launch of the first-ever bitcoin-futures exchange-traded fund</a>, the ProShares Bitcoin Strategy ETF. He said it was an accessible trading vehicle that makes it easy for institutional investors who want exposure to the cryptocurrency. The billionaire investor said stocks are on the upswing after hitting a bottom last week and those moves are "spilling over" into other asset classes such as cryptocurrencies. "You see bitcoin and Bitcoin and what it's done over the last few weeks. I can't tell you it's a value but I won't tell you that you should short it because you know it's likely to be higher in the coming months," said Minerd. He also said he still sees the potential for bitcoin's price to increase to $400,000, a <a href="https://markets.businessinsider.com/news/currencies/bitcoin-should-be-worth-400000-guggenheim-scott-minerd-says-2020-12">call made in December</a> based on its scarcity and value relative to gold.Bitcoin during Tuesday's session rose about 2% to trade above $63,000, getting closer to its all-time high of $64,804.72 reached in April.

The majority of cryptocurrencies are 'garbage' and only a few will emerge as winners, says Guggenheim's Scott Minerd

<ul class="summary-list"><li><keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">Markets</keyword> are hooked on economic <keyword id="11922603" type="UNKNOWN" weightage="60" keywordseo="stimulus" source="Orion">stimulus</keyword>, and central banks have no exit strategy, <keyword id="11899354" type="UNKNOWN" weightage="60" keywordseo="scott-minerd" source="Orion">Scott Minerd</keyword> said.</li><li>"For the time being, we're just addicted to this," <keyword id="11899353" type="UNKNOWN" weightage="60" keywordseo="guggenheim" source="Orion">Guggenheim</keyword>'s chief investment officer said Monday.</li><li>Minerd predicted US stocks could plunge 15% by the end of October.</li></ul>Central banks are now playing a role they weren't designed for, and have ended up directing markets hooked on its extraordinary stimulus, according to Guggenheim's Scott Minerd."For the time being, we're just addicted to this," Guggenheim's global chief investment officer said at the <a href="https://www.youtube.com/watch?v=7P9M3h-jzG8">Milken Institute's 2021 Global Conference</a> Monday. "And there is no exit plan for the central banks."The Federal Reserve, like central banks around the world, began pumping stimulus into the US economy during the coronavirus pandemic. It took action such as $2.3 trillion in lending to support businesses, households, and financial markets, as well as state and local governments whose revenues suffered during the crisis. But Minerd said central banks are acting in a way they have never done before. "The role of the <keyword id="11964297" type="UNKNOWN" weightage="60" keywordseo="central-bank" source="Orion">central bank</keyword> was to provide marginal liquidity at the times of crisis, and then to withdraw it after the economy started to stabilize and come back," Minerd said. "Central banks are now running the markets."Minerd has previously predicted <a href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-us-stocks-decline-rough-fall-bitcoin-price-2021-7">US stocks could plunge 15%</a> by the end of October, based on concerns related to <keyword id="11893994" type="UNKNOWN" weightage="60" keywordseo="covid-19" source="Orion">COVID-19</keyword> and its impact on global economic growth.Influential figures such as Michael Burry, Leon Cooperman, and Carl Icahn have warned against the consequences of the Fed overstimulating the economy. They argue that such massive money creation by central banks will result in high inflation.The Fed is likely to formally announce a reduction of its extraordinary support <a href="https://www.businessinsider.com/tapering-federal-reserve-meeting-minutes-fomc-july-asset-purchases-timing-2021-8?r=US&amp;IR=TIR=T">after its November Federal Open Markets Committee meeting</a>, provided markets aren't in turmoil over the debt ceiling, with the actual reduction in bond purchases expected to take place in December.Last month, it said tapering is imminent, and "if progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted."Read More: <a href="https://www.businessinsider.com/stock-picks-to-buy-now-undervalued-with-upside-q4-morningstar-2021-10">These 33 undervalued stocks are Morningstar analysts' 'best ideas' for upside in an overvalued market heading into Q4</a>

Stock markets are now addicted to stimulus - and central banks have no exit plan, Guggenheim's Scott Minerd says

<ul><li>Scott Minerd spoke on a panel at the Milken Institute 2020 Global Conference on Monday and said that the <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> are betting on a <keyword id="99719" type="PERSON" weightage="60" keywordseo="Joe-Biden">Joe Biden</keyword> win. </li><li>The Guggenheim chief investment officer explained that stocks that would flourish under a Biden win, like those in alternative energy, are flourishing right now. </li><li>He added that a <keyword id="10023587" type="UNKNOWN" weightage="60" keywordseo="democratic-sweep">Democratic sweep</keyword> would most likely be the best for the stock market in the short run and not the "disaster" that many are forecasting.</li></ul><ul><li><a href="https://www.businessinsider.com/?hprecirc-bullet?utm_source=markets&amp;utm_medium=ingestgest">Visit Business Insider's homepage for more stories</a>.</li></ul>Guggenheim's Scott Minerd said on Monday that the market is betting on Democratic presidential nominee Joe Biden to win the election.During a panel at the <a href="https://milkeninstitute.org/events/global-conference-2020/livestream/global-capital-markets">Milken Institute 2020 Global Conference</a>, the chief investment officer said stocks that would flourish under a Biden administration are performing much better right now than stocks that would boom under <keyword id="6354862" type="UNKNOWN" weightage="60" keywordseo="trump">Trump</keyword>.Minerd cited alternative energy companies as an example of stocks that are gearing up for a Biden win. The <a href="https://markets.businessinsider.com/etfs/invesco-cleantech-etf-us46137v4077">Invesco Cleantech ETF</a> is trading at a record high, and the <a href="https://markets.businessinsider.com/etfs/first-trust-nasdaq-clean-edge-green-energy-index-fund-us33733e5006">First Trust Nasdaq Clean Edge Green Energy Index Fund </a>is up almost 100% year-to-date. The iShares <a href="https://markets.businessinsider.com/etfs/ishares-global-clean-energy-etf-us4642882249">Global Clean Energy</a> ETF is trading at its highest level since 2010, and the <a href="https://markets.businessinsider.com/etfs/invesco-solar-etf-us46138g7060">Invesco Solar ETF</a> is at its highest point since 2011.Read more: <a href="https://www.businessinsider.com/investing-advice-strategies-vshaped-economic-recovery-5-trades-morgan-stanley-2020-10">Morgan Stanley lays out its 5 favorite trades for investors looking to dominate a looming V-shaped recovery, even if a stimulus deal takes until 2021</a>Minerd also said that the resolution of the election "will be positive for markets," and reduce the risk premium of who the next president is going to be. He added that a Democratic sweep would most likely be the best for the stock market in the short run because there will be "lots of stimulus." "I don't see it in the near-term being the disaster that a lot of people are proffering in terms of having a Democratic administration," the investment chief said.

Guggenheim's Minerd says the market is betting on a Joe Biden victory, and a Democratic sweep will be best for stocks in the short run

Dear Readers,The annual <a href="https://www.businessinsider.com/category/milken-2019" target="_blank" rel="noopener">Milken Institute Global Conference</a> is perhaps the largest assembly of the world's greatest financial minds. Heavy hitters from across the business, investing, and economic landscapes descend upon Beverly Hills for three days and set the agenda for the rest of the year.Business Insider was there, and, in the process, got the scoop on the themes that will define 2019.If the core thesis of Milken 2019 had to be distilled into an easily-digestible phrase, it would be "challenging convention." That's what many of the panelists and experts interviewed by Business Insider attempted to do throughout.They took issue with <a href="https://www.businessinsider.com/milken-conference-2019-recap-overview-main-themes-from-investors-economists-2019-5" target="_blank" rel="noopener">three main misconceptions</a> they see polluting market outlooks across Wall Street: (1) a recession is imminent, (2) the Fed's next move will be an interest-rate cut, and (3) inflation is gone forever. Pundits of all types <a href="https://www.businessinsider.com/milken-conference-2019-recap-overview-main-themes-from-investors-economists-2019-5" target="_blank" rel="noopener">pushed back against these prevailing narratives</a> in an attempt to set the record straight.Panelists throughout the week were also asked to identify their <a href="https://www.businessinsider.com/milken-conference-2019-10-investing-experts-share-their-biggest-fears-2019-4" target="_blank" rel="noopener">biggest market fears</a>, and their lack of overall consensus was troubling.Here are some of the other main stories we published based on our findings:The CEO of SoftBank Investment Advisers, who runs the world's biggest venture fund, offers an inside look at how he picks which companies to lavish with billions of capitalRajeev Misra runs the $100 billion SoftBank Vision Fund, which contains roughly 80 portfolio companies at a given time. Once the firm has invested in a company, it's treated like royalty and given ample capital - as long as it keeps growing.In front of a packed auditorium at Milken, Misra discussed SoftBank's process for deciding which companies are worthy of investment. Key attributes include a strong platform, and an ability to work in tandem with the Vision Fund's other existing investments.<a href="https://www.businessinsider.com/softbank-vision-fund-investment-process-rajeev-misra-milken-conference-comments-2019-4" target="_blank" rel="noopener">READ MORE HERE &gt;&gt;</a>The investment chief at $265 billion juggernaut Guggenheim made the crowd at Milken gasp with a bold stock-market forecastIt takes a lot to shock the audience at Milken, but Guggenheimer global CIO Scott Minerd did just that on the conference's opening day. He forecasted minimal annual returns for stocks over the next decade - a forecast that drew gasps from those in attendance.One element of Minerd's largely bearish outlook is the fact that both stock and bond prices are "inflated," and therefore far less likely to generate strong returns as along as current conditions persist.<a href="https://www.businessinsider.com/stock-market-forecast-for-decade-of-weak-returns-scott-minerd-2019-4" target="_blank" rel="noopener">READ MORE HERE &gt;&gt;</a>The global elite at Milken have zeroed in on an overlooked signal they say will determine the future of the global economyEvery macro panel at Milken seemed to end up discussing the same overlooked economic signal: productivity. International Monetary Fund chairwoman Christine Lagarde kicked off the proceedings by mentioning it as an indicator to watch, and her take was quickly confirmed by others on her panel.Business Insider rounded up commentary across multiple panels in order to provide context around why the global elite are so keenly focused on productivity.<a href="https://www.businessinsider.com/milken-conference-2019-panelists-discuss-the-global-economy-future-2019-4" target="_blank" rel="noopener">READ MORE HERE &gt;&gt;</a>Here's the rest of our Milken coverage so far. <a href="https://www.businessinsider.com/category/milken-2019" target="_blank" rel="noopener">Check back for more</a> throughout the next week or two.<ul><li><a href="https://www.businessinsider.com/private-equity-industry-dotcom-era-comparison-ignacio-jayanti-2019-5" target="_blank" rel="noopener">A Wall Street investment chair warns that the private-equity industry is relying on the same 'pillars of value destruction' that caused major problems in the dot-com era</a></li><li><a href="https://www.businessinsider.com/milken-2019-how-private-equity-boom-intensifies-stock-market-liquidity-risk-mark-machin-2019-5" target="_blank" rel="noopener">A $369 billion investor lays out how the private-equity boom is supercharging a major risk in the stock market</a></li><li><a href="https://www.businessinsider.com/why-european-economy-turmoil-worries-wall-street-chief-risk-officer-lara-warner-2019-5" target="_blank" rel="noopener">'Small earthquakes can lead to large tsunamis': A Wall Street chief risk officer breaks down why European turmoil is what keeps her up at night</a></li><li><a href="https://www.businessinsider.com/debt-crisis-christine-lagarde-explains-why-she-is-double-concerned-2019-4" target="_blank" rel="noopener">IMF chief Christine Lagarde outlines her 2 major worries around the global economy - and explains why they're sowing the seeds of a new crisis</a></li></ul> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/reporter-calls-out-claim-that-fbi-was-happy-comeys-firing-sarah-huckabee-sanders-white-house-press-briefing-2017-5">This video shows the moment Sarah Sanders lied to a room full of reporters about FBI agents telling her they were happy Trump fired Comey</a></h3> <div> </div> </div>

We went to Milken, a massive assembly of the world's greatest financial minds. Here are our biggest takeaways.

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Milken InstituteGuggenheim Investments Global Chief Investment Officer Scott Minerd speaks during an event at the Milken Institute's Global Conference</div></div></div><ul class="summary-list"><li><a href="https://www.businessinsider.com/giggenheim-scott-minerd-economic-indicator-recession-about-18-months-2019-1">Scott Minerd</a>, the global chief investment officer of Guggenheim Investments, said US stock valuations are so high that he expects minimal returns over the next decade.</li><li>He added that both stock and bond prices are "inflated" and isn't expecting very strong returns from either asset class.</li><li>Speaking at the annual Milken Institute Global Conference, Minerd wasn't alone in saying the 10-year bull market in stocks will eventually give way to weaker returns.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>Scott Minerd, the global chief investment officer for Guggenheim Investments, left a Milken Institute audience gasping with a prediction of 10 years of shaky returns."For US equities over the next decade we should be expecting maybe a 1% to 2% return" based on current stock market valuations, Minerd said. "This long period of outperformance is eventually going to run into a period of underperformance."Minerd was speaking along with a group of other respected investment pros Monday at the annual Milken Institute Global Conference in Beverly Hills, California. Since the end of 2008, <a href="https://markets.businessinsider.com/index/s&amp;p_500">the S&amp;P 500</a> has delivered an annual return of about 18%, roughly double its historic average.<a href="https://www.businessinsider.com/stock-market-records-amazons-visit-to-madison-avenue-and-mental-health-startups-2019-4">US stocks are at record highs</a> with the <a href="https://www.businessinsider.com/category/bull-market">bull market in its tenth year</a>, and Minerd wasn't alone in predicting weaker returns in the years ahead. The participants pointed out obstacles including sluggish economic growth and political turmoil in Europe and rising political divisions.That would be troubling enough, but he said other assets are also overly expensive."Not only are equities inflated in value, but bonds are inflated in value," Minerd said. "We're continuing to inflate assets … and not really being compensated to take on a lot of risk."He added that inflation is likely to stay low for a long time, and bonds won't provide much of a return either.Guggenheim managed $209 billion in assets at the end of the first quarter 2019. <a href="https://www.businessinsider.com/guggenheim-minerd-investor-warns-about-market-bubbles-in-davos-letter-2018-1">It's not the first time Minerd has voiced expressed concern about future stock performance</a>. But the extent of his pessimism caught at least one of his fellow panelists by surprise."Worse than us!" exclaimed David Hunt, president and CEO, PGIM, Prudential's investment management business. Minutes earlier, Hunt had said he expected annual returns of about 4% over the next decade. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/avengers-endgame-end-credits-hidden-meaning-behind-mobius-strip-2019-4">The hidden meaning behind the 'Avengers: Endgame' end credits</a></h3> <div> </div> </div>

Guggenheim investment chief Scott Minerd just made a bold forecast for a sluggish decade of US stock returns

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><a href="https://www.flickr.com/photos/milkeninstitute/with/33857495148/">Milken Institute / Flickr</a></div></div></div><ul class="summary-list"><li>The main theme among the top financial minds at the Milken Institute Global Conference was challenging consensus and rejecting popular narratives that have recently gained steam.</li><li>Those include: a recession is imminent, the Fed's next move will be a rate cut, and inflation will stay low on a permanent basis.</li><li>Christine Lagarde, Scott Minerd, and Mark Attanasio were among the financial heavyweights to dispute these ideas. Their thoughts, and many more, are provided in detail below.</li><li><a href="https://www.businessinsider.com/category/milken-2019" target="_blank" rel="noopener">Follow all of Business Insider's coverage of the 2019 Milken Conference here.</a></li></ul>By the time the world's foremost financial elite descended upon the Beverly Hilton for the 2019 <a href="https://www.businessinsider.com/category/milken-2019" target="_blank" rel="noopener">Milken Institute Global Conference</a> earlier this week, there were a handful of prevailing narratives dominating the landscape.The first dealt with forecasts for an <a href="https://www.businessinsider.com/next-recession-how-to-trade-invest-guard-against-economic-meltdown-jpmorgan-2019-4" target="_blank" rel="noopener">economic recession</a>. For months, pundits pointed at red flags like an <a href="https://www.businessinsider.com/next-stock-market-crash-yield-curve-inverted-negative-yields-impact-2019-3" target="_blank" rel="noopener">inverted yield curve</a> and sluggish growth as signs of an imminent slowdown.The second revolved around the <a href="https://www.businessinsider.com/category/federal-reserve" target="_blank" rel="noopener">Federal Reserve</a>. After years spent laying out and executing a monetary-tightening plan, the central bank pumped the brakes in early 2019.Investor expectations quickly became so subverted that many pundits said a rate cut was the most likely scenario. President Donald Trump said <a href="https://twitter.com/realDonaldTrump/status/1123285120864092162" target="_blank" rel="noopener">on Twitter</a> on Tuesday that the economy would "go up like a rocket if we did some lowering of rates."And the third focused on inflation - the key pricing metric closely monitored by the Fed. As 2019 progressed, an growing chorus of pundits began openly wondering if inflation would stay low forever. Bloomberg Businessweek ran a cover story entitled "<a href="https://www.bloomberg.com/news/articles/2019-04-17/did-capitalism-kill-inflation" target="_blank" rel="noopener">Is Inflation Dead?</a>"All three narratives were quickly dismissed by those in attendance at Milken.Read more: <a href="https://www.businessinsider.com/milken-conference-2019-10-investing-experts-share-their-biggest-fears-2019-4" target="_blank" rel="noopener">10 of the world's best investing minds shared their biggest fears at Milken - and the lack of consensus is a major red flag of its own</a>It started immediately with the opening discussion. Moderated by <a href="https://www.imf.org/" target="_blank" rel="noopener">International Monetary Fund</a> chairwoman <a href="https://en.wikipedia.org/wiki/Christine_Lagarde" target="_blank" rel="noopener">Christine Lagarde</a> - who challenged the ideas herself during opening remarks - a five-person panel featuring some of the world's smartest financial minds immediately laid seige.That laid the groundwork for similarly skeptical comments on subsequent panels. By the end of the conference, a clear theme had emerged: challenging the consensus.<h2>1) Misconception #1: A recession is imminent</h2>Lagarde led the charge right off the bat, stating that fears of a near-term meltdown are vastly overblown. She pointed to the latest quarterly US gross domestic product number, which, at 3.2%, came in almost a full percentage point higher than consensus estimates."You have about 70% of the global economy that is slowing, but it's still growing," she said. "We're not expecting a recession. It's certainly not in our baseline."Lagarde also said the recent GDP number will "certainly lead us to reassess our forecast for growth in the United States."Perhaps the most optimistic out of anyone was <a href="https://www.pgim.com/biography/David-Hunt" target="_blank" rel="noopener">David Hunt</a>, the president and CEO of PGIM, which is one of the world's 10 biggest asset managers. He thinks the US economy is in no serious danger of a recession, and believes it's stronger than most realize."There is not a synchronized global slowdown at all," he told Lagarde during his panel. "The US is actually doing very well, and we would argue that it's actually doing better than its long-term potential. So we're rather optimistic."Read more: <a href="https://www.businessinsider.com/milken-2019-masters-of-the-universe-fret-over-the-economy-even-as-their-wealth-grows-2019-5" target="_blank" rel="noopener">Inside Milken 2019, where Masters of the Universe fret over the economy even as their wealth grows</a><a href="https://en.wikipedia.org/wiki/D._Nathan_Sheets" target="_blank" rel="noopener">Nathan Sheets</a> - the chief economist at PGIM - also cited recent economic data as putting to rest the idea of an imminent recession. In addition to the latest GDP print, he pointed to stronger-than-expected consumer confidence data released on Tuesday."I think it's important for the Fed to note that the curve inverted," Sheets told Business Insider. "But I also think those circumstances were special and reflected concerns about economic conditions that have improved since."<a href="https://www.ssga.com/global/en/about-us/who-we-are/team.bio.64145919.html" target="_blank" rel="noopener">Lori Heinel</a> - the deputy CIO of State Street Global Advisors - said that, yes, the economy is in the latter part of its current cycle. But she still sees it extending, possibly until 2021 and beyond. To Heinel, the key is the Fed's pivot towards monetary accommodation."The fact that the Fed has become much more dovish actually gives us confidence that the cycle extends," she told BI. "You don't typically have recessions in the conditions we have right now - because the Fed is usually one of the reasons you have a recession, because they tighten too quickly."To <a href="https://markets.businessinsider.com/news/stocks/gross-domestic-product-q1-2019-2019-4-1028142680" target="_blank" rel="noopener">Seema Shah</a>, a global investment strategist at Principal Global Advisors, the key variable is China. And judging by how conditions are presently, she says there's reason for optimism."We don't see a recession in the near future," she told BI. "Even if there's a slowdown, it definitely won't drop into dangerous territory. One of the main reasons for that is the US is being lifted by Chinese growth. We strongly believe in the Chinese economy coming through."Even people who have been bracing for a recession for years have changed their tune. That includes <a href="https://www.crescentcap.com/team/view/2-mark-attanasio" target="_blank" rel="noopener">Mark Attanasio</a>, the cofounder and managing partner of Crescent Capital, who also owns the Milwaukee Brewers."We've been concerned since 2014 that the cycle is coming to an end," he said on a panel about global capital markets. "Yet here we are, in 2019, and we feel we still have at least another year to go."<h2>2) Misconception #2: The Fed's next move will be an interest-rate cut</h2>"The question of the hour: Is the Fed going to cut rates just days after we got 3.2% GDP?" Lagarde asked her panel of experts.What followed was a cavalcade of skepticism that extended into other panels and private interviews. The takeaway was clear: most everyone thinks a rate cut is a far-flung outcome - even for the more moderate folks who expect the Fed to stay on hold indefinitely.<a href="http://www.statestreet.com/executive-leader/ronald-ohanley.html" target="_blank" rel="noopener">Ronald O'Hanley</a>, the president and CEO of State Street, was one of the first to throw cold water on the idea of a rate cut."The data is so overwhelmingly positive in the US that it would be very hard to cut rates at this point," he said. "I personally don't believe that the Fed will do it."His colleague Heinel agreed."Our macro view is that that US is bottoming out and starting to gain momentum again," she told BI. "That may precipitate the need for a rate hike."Read more: <a href="https://www.businessinsider.com/softbank-vision-fund-investment-process-rajeev-misra-milken-conference-comments-2019-4" target="_blank" rel="noopener">The CEO of SoftBank Investment Advisers, who runs the world's biggest venture fund, offers an inside look at how he picks which companies to lavish with billions of capital</a>Others who fielded the question were more keenly focused on how inflation will dictate the Fed's next move. That included <a href="https://www.investopedia.com/contributors/53555/" target="_blank" rel="noopener">Scott Minerd</a>, the global CIO for Guggenheim Investments. "By the time we get to December, we're going to see another pickup in inflationary pressure, which will cause the Federal Reserve to have to act to increase rates again," he said. "Even though the economy is strong, it's probably a good time to lighten up on risk assets and prepare for possible rate hikes."Shah also thinks misinformed rate-cut expectations are stemming from an incorrect understanding of the inflationary landscape."I feel like inflation will eventually come back, so the discussion over whether the Fed is going to cut rates is confusing," she told BI. "And if they do move in that direction, it would be a mistake. The pressure is actually going to be on the Fed to hike."Sheets, meanwhile, occupies the middle ground between rate-cutters and those forecasting hikes. He thinks the Fed will be on hold for a long time."Inflation is soft enough that [the Fed] doesn't need to hike," he told BI. "But the labor market is tight enough that it's going to be a heavy lift to cut."<h2>3) Misconception #3: Inflation is gone forever</h2>Speaking of inflation, another theory that gathered serious steam in the weeks leading up to Milken was the idea that price increases would stay subdued indefinitely.A main component of this argument revolves around the <a href="https://en.wikipedia.org/wiki/Phillips_curve" target="_blank" rel="noopener">Phillips curve</a> - an econometric model that suggests inflation should rise as unemployment falls. Yet, with unemployment currently sitting near its lowest level in 50 years, rising inflation is nowhere to be found. Those who say inflation is dead point to the inefficacy of the Phillips curve as a primary reason.But the experts at Milken viewed this as incorrect, if not simplistic, reasoning.Lagarde, for one, is still hopeful the Phillips curve will spring into action at some point. She's confident it will work, and that inflation will gradually pick up.Read more: <a href="https://www.businessinsider.com/milken-conference-2019-panelists-discuss-the-global-economy-future-2019-4" target="_blank" rel="noopener">The global elite at Milken have zeroed in on an overlooked signal they say will determine the future of the global economy</a>Minerd shares the view that while inflation is hibernating, it won't stay asleep forever."This lull in inflation that we're seeing right now will slowly pass away," he said.And then there's Sheets, who doesn't see anything problematic about low inflation. He told BI that the combination of solid growth, low inflation, and sidelined central banks has created a strong enviroment for markets. Beyond that, he thinks calls for the death of inflation are vastly overstated."I think the idea that inflation is dead is more rhetoric than anything," he said. "At some point, we'll start to see inflation pick up."<h2>Bonus: Brexit was a laughingstock</h2>One final note from Milken revolves around the ongoing Brexit situation. It didn't come up often, but each time it did, the mere mention elicited laughter and eye-rolls.It's not that the conference experts think it's particularly funny. They were just bemused by the fact that it's such an opaque, uncertain situation. Nearly everyone punted on the topic, citing a lack of understand or, in some cases, downright fatigue.Shah was one of the few people with a core Brexit view, and she's advising investors to stay away. The way she sees it, the possible outcomes are split 50/50. And it's unwise to trade around odds that amount to a coin flip.Perhaps by next year Brexit takes will have crystalized. Until then, the world's global financial elite will worry themselves with the other three debates outlined above. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/tesla-mini-model-s-for-kids-that-costs-600-family-bought-teach-child-about-driving-electric-2019-4">Tesla has a mini Model S for kids that costs $600, and this family bought it to teach their child about driving electric</a></h3> <div> </div> </div>

The world's greatest investors and economists spent much of Milken dispelling 3 key misconceptions. Here's what they said to set the record straight.

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><a href="https://www.flickr.com/photos/milkeninstitute/with/33857495148/">Milken Institute / Flickr</a></div></div></div><ul class="summary-list"><li>Ten experts at the Milken Institute Global Conference couldn't agree when asked about the biggest risk facing the investment landscape and overall economy.</li><li>The lack of a clear-cut adversary has the panelists in defensive mode, even as financial markets remain strong.</li><li><a href="https://www.businessinsider.com/category/milken-2019" target="_blank" rel="noopener">Follow all of Business Insider's coverage of the 2019 Milken Conference here.</a></li></ul>BEVERLY HILLS - Risks to the global market landscape were a major talking point during the first day of the <a href="https://www.milkeninstitute.org/events/conferences/global-conference/2019/program-detail" target="_blank" rel="noopener">Milken Institute Global Conference</a> - perhaps unsurprisingly, given recent trepidation over a possible recession.What was surprising, however, was the failure of <a href="https://www.businessinsider.com/category/milken-2019" target="_blank" rel="noopener">Milken</a> panelists to agree on the most likely source of turbulence. There's usually something resembling consensus around the biggest risk, whether it may be the US-China trade war, or the <a href="https://www.businessinsider.com/category/federal-reserve" target="_blank" rel="noopener">Federal Reserve</a>.But not right now.Without a clear-cut adversary, both the investing landscape and the economy are as uncertain as it's been in some time. That's forced experts like those speaking at Milken to shift into a more defensive stance, even as financial markets <a href="https://markets.businessinsider.com/news/stocks/stock-market-news-sp-500-on-track-to-close-at-record-high-2019-4-1028131134" target="_blank" rel="noopener">stay strong</a> in the immediate term.It all fits with the cautiously optimistic tone that characterized the first-day panels at Milken. While there are still returns to be gleaned in the market, most everyone is looking over their shoulder, waiting for a different bogeyman to emerge.Provided below are the biggest fears laid out by 10 experts across two separate Milken panels. Lara Warner - Group Chief Risk Officer, Credit Suisse"I hate to say, but it has to come back to Europe. I do worry that we're in a period where small earthquakes can lead to large tsunamis. And it seems to be the place that is most fragile.""We just talked about the United States, and some of the disparities between the states and the federal government. Europe, in many ways, is an example of that, as a region. I think it's highly likely, with a number of elections coming in the next year or so, that we will see some shocks.""Our concern is: you have those shocks, no monetary options, no fiscal options, frankly, not-as-developed financial markets as you see here in the US. Some, but not strong exposure to the Asian region, which is probably the bouyant area around the globe. That's the place we're most worried about."Ronald O'Hanley - President and CEO, State Street Corporation"I don't know if it's a risk, or a phenomenon, but I think it's this idea that, since everything requires technology, what are the scale requirements? And are we seeing inevitable consolidation across every industry?"We're in the situation now, in financial services, that, between regulation and how to effectively employ technology, it's no longer too big to fail. It's too small to scale. And I think that's happening in industries around the world. It's great to develop the app. But the app doesn't work unless you develop the platform. And you can't develop the platform unless you have scale."How do we think, as investors, about what to invest in, that's ultimately going to achieve the kind of scale we think we need."Scott Minerd - Chief Investment Officer, Guggenheim Partners"I'm concerned about the butterfly effect. That risk premia are so low, assets are so highly valued, that all these unresolved issues - whether it be in Europe, or Latin America, or elsewhere - make it so that, just like 1998 with the Asian crisis, an event like devaluing the Thai baht will set off a chain reaction that we're not prepared for."Longer term, the real risk I see is we will end up back in an inflationary malaise because we don't have real policy solutions. What we're living through today looks like a lot of the 1940s and the 1950s. And ultimately, when the 60s came, with the expansion of the deficit with the Vietnam War, inflation began to take off."We're just like the proverbial frog in the pot of water. How do you boil a frog? You just put it in cold water, turn on the heat, and slowly let the pot come to a boil."David Hunt - President and CEO, PGIM, The Investment Management Business of Prudential"The systematic undervaluation of risk premia is a major risk. But we all suffer from fighting the last war. And I think we're all very much aware of what happened in the great financial crisis."The next crisis is going to come from a different place. I think it's going to come from technology and cyber. If I were looking for the thing that worries me the most, it would be an actual attack on the infrastructure of the financial markets that really bursts into it and creates a shutdown of the major pipes we use to do business. It's something we spend a lot of time working on and investing in."Tom Finke - Chairman and CEO, Barings"When we're investing, we're wondering what's going to disrupt the companies that we may be investing in today, and are they aware of it? What changes or disrupts an industry that we're long currently? It's a lot to keep you up at night."Joseph Naggar - Partner and Head of Structured Products, GoldenTree Asset Management LP"From a macro, top-down perspective, we're most closely watching the US dollar, which is up about 9% in the last year. Oil is sort of getting in the mid-70s. Things that will change this goldilocks environment. It's a race between the central banks and slower growth, and the central banks right now are winning. Things like that could change the macro environment."Mark Machin - President and CEO, Canada Pension Plan Investment Board"Isolationism in all of its forms."Sir Michael Hintze - Group Executive Chairman and Senior Investment Officer, CQS"Energy. Oil is about 3 to 3.5% of global GDP. The other energy pieces are about 2%. That price change will actually change the world. But if you really want to know what keeps me up at night, it's the global pandemic issue. That'll destroy the world."If you look at what happened when SARS hit, only 37 people died. The reality is that knocked global GDP down 3-4% pretty much overnight. That's something that could take us to the cleaners."Elif Bilgi Zapparoli - Co-Head of Global Capital Markets, Bank of America Merrill Lynch"Low interest rates. It allows for mispricing of risk."Mark Attanasio - Cofounder and Managing Partner, Crescent Capital Group LP"If you look at the growth of the stock market in the United States and wage growth. You see huge outperformance for how stocks have grown while wages have stayed relatively flat while growing. The good news is, that keeps inflation down. The bad news is, it's created all kinds of divides in this country that may be irreparable if they're not changed soon." <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/reporter-calls-out-claim-that-fbi-was-happy-comeys-firing-sarah-huckabee-sanders-white-house-press-briefing-2017-5">This video shows the moment Sarah Sanders lied to a room full of reporters about FBI agents telling her they were happy Trump fired Comey</a></h3> <div> </div> </div>

10 of the world's best investing minds shared their biggest fears at Milken - and the lack of consensus is a major red flag of its own

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Milken Institute</div></div></div><ul class="summary-list"><li>Lara Warner, the group chief risk officer for Credit Suisse, said risks to Europe's economy and stock markets are rising and options for dealing with a crisis are limited.</li><li>Warner says Europe's markets are "fragile" and unexpected election results or other surprises could have huge consequences.</li><li>Experts including Warner and Scott Minerd of Guggenheim Investments said the European Central Bank may not be able to help if the regional economy gets worse.</li><li><a href="https://www.insider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>Lara Warner, the group chief risk officer for Credit Suisse, warned that Europe's economy is teetering on the brink and could suffer a disastrous downturn."I do worry that we are in a period where small earthquakes can lead to large tsunamis," she said during a panel discussion at the Milken Institute Global Conference. "It seems to be the place that is the most fragile."While European stocks have rallied this year - with some major national indexes beating <a href="https://markets.businessinsider.com/index/s&amp;p_500">the S&amp;P 500</a> in 2019 - <a href="https://www.businessinsider.co.za/ecb-interest-rate-decision-for-march-2019-2019-3">the European economy looks worse and worse</a>.It's already facing big challenges including <a href="https://www.businessinsider.com/germany-and-italy-recessions-as-european-economy-slumps-2019-1">short recessions in Germany and Italy</a>. Italy also faces political instability, questions about the health of its banks, and rising tensions with Europe about its debt, <a href="https://www.businessinsider.com/italy-risky-bank-loans-and-poor-growth-prospects-could-destroy-eurozone-2019-4">all of which throw its growth prospects into question</a>. Meanwhile there's <a href="https://www.businessinsider.com/disgruntled-tory-donors-divert-100000s-to-second-brexit-referendum-campaign-2019-4">no end in sight to Brexit</a>. Experts don't expect the continental economy to tip into a recession, but Warner and other experts say they're worried about how vulnerable the region looks. "It's highly likely with the number of elections coming over the next year or so that we will see some shocks," she said.If those weak points and threats weren't enough, Warner doubts the European Central Bank will be able to do anything to avert a bigger economic crisis if one develops because interest rates are already at zero and the bank is already attempting to stimulate the regional economy."There really is no more monetary policy option for Europe, and fiscal options, frankly," said Warner, whose firm manages $394 billion in assets."They're out of bullets, or they're very close," said Scott Minerd, global chief investment officer for Guggenheim Partners, which manages $265 billion in assets.David Hunt, the president and CEO of Prudential's $1.16 trillion investment management business PGIM, agreed with Warner that Europe isn't prepared for another economic downturn. And he doubts that it will get its act together in time."The EU has not yet completely harmonized their approach to banking and reform," Hunt said. "There are some very clear things that Europe needs to do to get ready to the next turn" in the economic cycle.Minerd said the European Union either needs to achieve a much greater level of fiscal unification than it has before, or it needs to scale down its ambitions and become a customs union instead of a multinational government.Either way, he said Europe's authorities and voters are going to have to answer some fundamental problems in order to deal with the challenges Warner and others pointed out. "The European experiment is in great danger," he said. "Is it going to retreat or is it going to go forward? Staying where it is is not a long term solution." <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/game-thrones-season-8-episode-1-premiere-details-you-missed-jon-snow-2019-4">13 details you missed in the 'Game of Thrones' season 8 premiere</a></h3> <div> </div> </div>

'Small earthquakes can lead to large tsunamis': A Wall Street chief risk officer breaks down why European turmoil is what keeps her up at night

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Getty Images/PoolDirector of National Economic Council Larry Kudlow</div></div></div><ul><li>Top White House brass, including President Donald Trump and Vice President Mike Pence, have recently called for the Fed to cut interest rates.</li><li>On Friday, Pence argued the Fed should cut rates because inflation is low.</li><li>Earlier this week, at the Milken Institute Global Conference, some of the biggest names on Wall Street pushed back against the need for Fed rate cuts, saying inflation will pick up soon. </li><li><a href="https://markets.businessinsider.com/?utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Visit Markets Insider's homepage for more stories</a>.</li></ul>The US economy is on fire.First-quarter GDP, out last week, <a href="https://markets.businessinsider.com/news/stocks/gross-domestic-product-q1-2019-2019-4-1028142680">grew at an annualized rate of 3.2%</a>. And the good news kept coming on Friday, with the the Labor Department announcing <a href="https://markets.businessinsider.com/news/stocks/nonfarm-payrolls-jobs-report-for-april-2019-2019-5-1028165473">US nonfarm payrolls added 263,000 job in April</a>, pushing the unemployment rate down to 3.6%, its lowest since December 1969. Yet the White House says things are just getting started - so long as the Fed cuts interest rates. Following Friday's jobs report, Vice President Mike Pence told CNBC's Eamon Javers that the Fed should consider removing employment from its dual mandate and cutting interest rates."The fact that the Fed looks at full employment and monetary policy and inflation," Pence said.He continued: "And instead, by just looking at inflation, you would make clear there's no inflation happening here, the economy is roaring. This is exactly the time, not only to not raise interest rates, but we ought to consider cutting them."Pence's comments echo similar calls made by top White House brass, including <a href="https://markets.businessinsider.com/news/stocks/trump-pressured-fed-cut-rates-what-itd-take-for-that-to-happen-2019-4-1028090701">President Donald Trump</a> and <a href="https://markets.businessinsider.com/news/stocks/trump-adviser-rate-cut-economists-say-probably-wont-happen-soon-2019-4-1028152437">Larry Kudlow</a>, his chief economic adviser. Yet Wall Street doesn't see it that way. Earlier this week, at the 2019 Milken Institute Global Conference in Beverly Hills, some of the world's greatest investors and economists <a href="https://www.businessinsider.com/milken-conference-2019-recap-overview-main-themes-from-investors-economists-2019-5">pushed back against the need for rate cuts</a>. Read more: <a href="https://www.businessinsider.com/milken-conference-2019-recap-overview-main-themes-from-investors-economists-2019-5">The world's greatest investors and economists spent much of Milken dispelling 3 key misconceptions. Here's what they said to set the record straight</a>."The data is so overwhelmingly positive in the US that it would be very hard to cut rates at this point," said Ronald O'Hanley, the president and CEO of State Street. "I personally don't believe that the Fed will do it."And his colleague Scott Minerd, the global chief investment officer for Guggenheim Investments, agreed. "I think the idea that inflation is dead is more rhetoric than anything," he said. "At some point, we'll start to see inflation pick up," and the Fed will have to "act to increase rates again." <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/reporter-calls-out-claim-that-fbi-was-happy-comeys-firing-sarah-huckabee-sanders-white-house-press-briefing-2017-5">This video shows the moment Sarah Sanders lied to a room full of reporters about FBI agents telling her they were happy Trump fired Comey</a></h3> <div> </div> </div>

The White House wants the Fed to cut rates. Wall Street says it's a terrible idea.

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Drew Angerer/Getty ImagesPresident Donald Trump and Federal Reserve Chair Jerome Powell</div></div></div><ul><li>President Donald Trump on Thursday <a href="https://www.businessinsider.com/trump-tariffs-on-mexican-goods-stop-migrant-influx-border-2019-5">threatened to impose tariffs of up to 25%</a> on goods coming into the United States from Mexico until the "illegal immigration problem is remedied."</li><li>Fed rate-cut expectations jumped on the news, with traders now seeing a 50% chance that the Fed will cut rates in July.</li><li>The average amount of time between the last rate hike and the first rate cut is seven months - we are currently at five months. </li><li>Visit <a href="https://markets.businessinsider.com/?utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">MarketsInsider.com</a> for more stories.</li></ul>President Donald Trump took his trade battle to a new front on Thursday when he threatened to <a href="https://www.businessinsider.com/trumps-mexico-tarrifs-threaten-usmca-criticized-gop-2019-5">impose tariffs of up to 25%</a> on goods coming into the United States from Mexico until the "illegal immigration problem is remedied."The announcement shocked financial markets, adding downward pressure to <a href="https://markets.businessinsider.com/news/stocks/stocks-drop-after-trumps-mexico-tariffs-china-data-hit-markets-2019-5-1028244349">global markets</a> that had already been reeling due to the recently renewed trade tensions between the US and China. Those worries sent the major averages down more than 1% on Friday and catapulted Fed rate-cut expectations higher. The market now sees a 50% chance that the Fed will cut rates at its July meeting, with that number jumping to 80% for September and 91.4% by year end. On Thursday, traders saw just a 34.5% chance the Fed would cut rates in July.The Fed <a href="https://www.businessinsider.com/federal-reserve-interest-rate-statement-december-2018-2018-12">last raised rates in December </a>and is projecting its next hike to happen in 2020. But, shifting policy quickly is not out of the question, according to Natixis economist Joe LaVorgna. He says the average time between the last rate hike and subsequent cut is seven months. A September rate cut would be nine months from the last hike.<div class="KonaFilter image-container display-table"><div><div class="image on-image">Natixis</div></div></div>"If the Fed does not meet investors' expectations, financial conditions (e.g., stocks) could dramatically tighten," Natixis economist Joe LaVorgna wrote in a note out Thursday. "This would have negative effects on an economy already in the midst of slowing." Trump's announcement on Thursday is the latest threat to a US economy that has already shown evidence of losing steam as tariffs on imports from Mexico would drive prices on <a href="https://www.businessinsider.com/trump-trade-policy-mexico-tariffs-worsening-trade-war-hurting-economy-2019-5">products like autos up significantly, potentially hurting consumer spending in the US</a>.Recent reports on indicators such as nominal goods exports and manufacturing activity have disappointed, and the <a href="https://www.frbatlanta.org/cqer/research/gdpnow.aspx">Atlanta Fed GDP Now model</a> shows the US economy is tracking to grow at just a 1.2% clip in the second quarter, down from the recently revised <a href="https://markets.businessinsider.com/news/interestrates/u-s-gdp-growth-downwardly-revised-to-3-1-in-q1-1028242044">3.1% growth in Q1.</a>A rate cut would appease Trump. He has long called for the Fed to cut rates and begin quantitative easing, releasing new money into supply, saying it would boost the economy. "You would see a rocket ship," he <a href="https://markets.businessinsider.com/news/stocks/trump-fed-should-cut-interest-rates-2019-4-1028089715">told reporters in April. </a>And LaVorgna said in a Friday note that the Fed should lower rates sooner rather than later to push inflation higher as the Fed has failed to meet its 2% inflation target for last 12 months."The current deviation of inflation from the target means that it would take years of 2%- plus inflation for the core PCE to average 2%," wrote LaVorgna. "At this point, that seems highly unlikely given that inflation is extremely low across most of the World." But others think that Fed should stick to its previous plan and prepare for rate hikes going into 2020. "By the time we get to December, we're going to see another pickup in inflationary pressure, which will cause the Federal Reserve to have to act to increase rates again," <a href="https://www.businessinsider.com/milken-conference-2019-recap-overview-main-themes-from-investors-economists-2019-5">said Scott Minerd</a>, the global chief investment officer for Guggenheim Investments, at the Milken Institute Global Conference on April 29. "Even though the economy is strong, it's probably a good time to lighten up on risk assets and prepare for possible rate hikes." <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/why-k2-harder-climb-mt-everest-2017-9">Mount Everest is not the hardest mountain to climb - here's what makes K2 so much worse</a></h3> <div> </div> </div>

You Searched For "minerd milken conference" and got 10 results

The majority of cryptocurrencies are 'garbage' and only a few will emerge as winners, says Guggenheim's Scott Minerd

Carla Mozée

Stock markets are now addicted to stimulus - and central banks have no exit plan, Guggenheim's Scott Minerd says

Shalini Nagarajan

Guggenheim's Minerd says the market is betting on a Joe Biden victory, and a Democratic sweep will be best for stocks in the short run

Emily Graffeo

We went to Milken, a massive assembly of the world's greatest financial minds. Here are our biggest takeaways.

Joe Ciolli

Guggenheim investment chief Scott Minerd just made a bold forecast for a sluggish decade of US stock returns

Marley Jay,Joe Ciolli

The world's greatest investors and economists spent much of Milken dispelling 3 key misconceptions. Here's what they said to set the record straight.

Joe Ciolli

10 of the world's best investing minds shared their biggest fears at Milken - and the lack of consensus is a major red flag of its own

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'Small earthquakes can lead to large tsunamis': A Wall Street chief risk officer breaks down why European turmoil is what keeps her up at night

Marley Jay,Joe Ciolli

The White House wants the Fed to cut rates. Wall Street says it's a terrible idea.

Jonathan Garber

Trump just took his trade battle to a new front - and now traders are more sure than ever that the Fed is going to cut rates

Carmen Reinicke

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