The mid-term elections are fast approaching and the economy is suffering primarily due to the government response to the pandemic. Voters are unhappy. Watch the narrative change soon, so that the pandemic will actually end this March allowing the economy to recover somewhat before the mid-terms. Good environment for stocks provided the Fed does not get carried away with interest rate increases.
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Who cares? We are all going down.
I suspect the market has gotten ahead of the economic recovery and we are in for a significant correction in the near term. Expect a 10-20 percent drop. Note sure that will light the fuse: fed tightening, international (Russia/Ukrainian headbutt?), or supply chain. That said in a five year window stabilization of supply chains, the end of the Pandemic, and continued increases in process efficiencies will lead to broader sustained growth. I also predict in the intermediate term a great climate for oil and gas profits, as the green transformation materializes slower than some might wish and traditional demands for transportation, electrical generation, and heating continue to grow.
Yes our economy is running to the edge of a cliff and we are speeding up on the way. The fed has to raise interest rates or the already high “Transitory inflation” which has been converted to high inflation (which is still under reported) will go exponential even more.
It amazes me that the average person can not see this.
The Fed will get carried away and inflation has no where to go but up. They have no choice but to drill a ho-e in the skull of the economy to release the massive pressure in order to keep the “patient” alive.