In the first Big Picture topic this week, “Stall Speed”, Jim and John cover the recent economic numbers and look to the future. Jim notes that economic growth in recent years has been driven by monetary policy, not fiscal policy. Not surprisingly, the market peaked in the third quarter of 2014, coinciding with the Federal Reserve ceasing its QE policy. Overall, Jim doesn’t see a recession in 2016, but the economy is operating at “stall speed”, meaning any severe shock to the economy could push the US into a recession. The next topic is “Back to Ground Zero”. The markets got off to a rocky start in 2016, with slowing economic growth here and abroad, falling commodities and a Fed rate hike in December. Since then, the Fed has reversed course, the dollar has fallen, and the “risk on” rally has returned. Jim believes this is a temporary reprieve and we may be moving back to ground zero later this year. He discusses the investment implications of a return to the “risk off” trade.