![]() ![]() ![]() Risk On growth oriented investing is what pays the bills here with an overweighting of small caps (given how much they are lagging large caps at this time). This will be a bullish green light to emerge into the next long term bull market. Whereas the more quickly annual inflation appears on pace for 2% or less, without unemployment rising, then indeed the Fed stuck the soft landing. A bearish hedge or straight up shorting of the market will be the trading path to profits. The more serious the Fed is about all the pronouncements above, the more likely a recession is in the forecast which brings with it a return of bearish conditions. The simpler, and much more plausible explanation, is that the Fed is going to do EXACTLY what they say they are going to do. (Meaning better to create recession than allow inflation to rise again). The greater risk is for the Fed to end their efforts too early allowing inflation to rise from the ashes.Meaning the Fed is underplaying the likely negative effects of their plans). Unemployment rate will climb to 4.5% before it improves (yet remember that at NO TIME in history has unemployment rate ever climbed that high without going at least 1% higher.There is more work to do to tamp down inflation to 2% target.Inflation is an economic disease that must be eradicated for the long term benefit of the economy.Like these talking points that are echoed time and time again at the multitudinous Fed speeches the past several months: Now consider how consistent Powell and other Fed officials have been on their messaging. This is the best way for investors to act in orderly fashion with the least disruption to the market. Remember that an ongoing mission of the Fed going back many administrations is the necessity for clear and consistent communication. That is a long shot friends.and thus seems like a grave mistake to bet on that outcome with higher stock prices. I share this insight versus those who somehow think it is more logical that the Fed is bluffing about their future intentions. ![]()
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