ACTV - Macro Dashes - Higher Rates For Longer And Continuing QT Could Pressure Stocks
Summary
- In late 2021, I warned that the Fed was a big risk to stocks in 2022 and projected a bear market with a roughly 20% loss on the S&P 500.
- Today, many in the market believe that the Federal Reserve will lower rates by the end of this year and thus are bidding up stocks.
- As I've repeated, it's not a quarter point here or there investors should be watching, but the level of quantitative tightening.
- The Fed must watch OPEC and Russian actions that impact energy, as well as, the Chinese reopening, to see if inflationary pressures will continue to subside or resurge.
- In a higher for longer interest rate regime with quantitative tightening pulling liquidity from the financial system, stocks will continue to face major challenges.
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Macro Dashes - Higher Rates For Longer And Continuing QT Could Pressure Stocks