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Paying no attention to the six judges behind the curtain

The Boston Globe logo The Boston Globe 6/24/2022 Larry Edelman
Protesters gathered outside the Supreme Court in Washington on Friday. © Jacquelyn Martin Protesters gathered outside the Supreme Court in Washington on Friday.

Stock prices took off Friday morning, about the time the Supreme Court put the final nail in the coffin of Roe v. Wade.

No, Wall Street wasn’t applauding the decision.

Investors don’t care about anything that doesn’t affect the bottom line. That includes the high court’s rejection of the right of a woman to have an abortion while affirming on Thursday the right of Americans to carry hand guns wherever they damn please. At Fenway Park, no problem. On the T, the same.

Two separate legal issues, I know. Two rights with different origins.

Rather, investors were cheered Friday by the latest results of a University of Michigan survey on the outlook for inflation. The report — which hit the wires about 10 minutes before the abortion news — showed a modest pullback in how much households expect consumer prices to climb over the next five years.

That’s considered positive because inflation can become a self-fulfilling prophecy: If enough people believe prices are going to rise, they will act in ways that will drive prices upward, such as by seeking higher wages and spending more.


Video: Biden: Supreme Court is ‘taking America back 150 years’ (NBC News)

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Earlier in the morning James Bullard, president of the Federal Reserve Bank of St. Louis, said fears of a recession in the United States were premature because consumers have plenty of cash and the economy continues to expand.

“I actually think we will be fine,” Bullard said in a speech in Zurich. “It is a little early to have this debate about recession probabilities in the US.”

Bullard’s words carry weight because he’s one of the Fed’s staunchest anti-inflation zealots. If he’s not overly concerned, why are we? Maybe the Fed won’t have to jack up rates as high as we thought?

Investors are grasping at straws — small-bore data points and other glimmers of hopeful news. But we are a long way from knowing when inflation might break or whether a recession is approaching. Still, after retreating into bear market territory last week, stocks recouped a bit of their recent losses.

The Standard & Poor’s 500 had a rare good week, adding 6.5 percent. The tech-laden Nasdaq gained 7.5 percent. The yield on the 10-year Treasury, which has been climbing in anticipation of more Fed rate increases, has eased back in the past couple of weeks by one-third of a percentage point to 3.14 percent.

I know that investors are acting rationally. The rules of market capitalism take precedence over moral misgivings. The Fed can impact the economy; the Supreme Court rarely does.

But the juxtaposition of the back-to-back Supreme Court opinions was dismaying. At least for anyone who worries that we are moving backward, that an American house bitterly divided can’t stand in the long run — and definitely can’t support a fair and thriving economy.

I have no data to back up this fear. It’s a gut feeling, and I hope I am wrong. Some significant minority of Americans think the justices got it right on guns and abortion.

I hope we will be fine.

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