From the Wall Street Journal's "Market Recovery Hinges on Quick Inflation Drop" posted early Monday:
Behind this year’s improved start for markets lies a broad wager that inflation will soon post a once-in-a-generation decline...
Hopes for a quick return to 2% inflation have encouraged bets that the Federal Reserve will pause and even reverse its interest-rate increases this year. Rate increases pummeled stocks and bonds in 2022, and a possible respite has sent both higher in January. The rally has extended to some of the riskier assets that had stung investors hardest last year, such as bitcoin and the ARK Innovation exchange-traded fund, known for its focus on fast-growing tech companies.
Many Wall Street strategists, however, are warning that a painless end to elevated inflation will be difficult to achieve. Previous episodes of inflation suggest that it rarely falls as fast as markets are now forecasting that it will in the absence of a serious recession...
Avoiding a serious downturn while inflation falls quickly would be a “Goldilocks scenario,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “Pretty much everything would have to go right,” she said.
For now, markets are holding relatively steady.
Charts: Yahoo!Finance sees a neutral commodity-channel-index pattern. Max pain starts the week at $135 (up $2) with a call mountain at $145 (up $5) and a put peak at $125 (down $15).
Whatever it is/was, it has significantly impacted the world’s markets.
One answer to your question:
From Reuters:
“A gauge of future U.S. economic activity tumbled for a 10th straight month in December with a widespread weakening outlook for manufacturing, home building and both job and financial markets.”
The Fed has reined in the economy. Now it needs to rein in itself.
Unfortunately, it still leaves the problem of over-dependence on Big Hydrocarbon….
reuters dot com/markets/us/fed-needs-mortgage-backed-securities-exit-plan-earlier-than-later-george-says-2023-01-23/
Replace the “ dot “ with a dot.
Ms George is, quite rightly, pointing out that the Fed’s intervening in the Great Recession is still hampering things to this day. The failure of the Congress to act in those times still haunts us, to say nothing of the failure to avoid the catastrophe in the first place….
Hopium.
“Details of how the new system will work are still being worked on. The intention is to begin rolling it out in the second half of 2023.”
This has 0% chance of success.