This inflationary bear market may have four stages
1. High inflation causes panic about interest rate hikes
2. Inflation has peaked, and the Fed’s relaxed attitude has led to an emotional rebound in expectations of interest rate cuts.
3. The Federal Reserve is willing to relax its policy and risks a market rebound causing inflation and another panic in the bear market.
4. The Fed’s firm determination to defeat inflation caused excessive tightening and the market fell into a tightening panic.
We are still between the second and third steps. For thoughts on the Federal Reserve’s interest rates, please read Sober’s long article on the history of interest rates. It describes in detail the logic of reasoning and the historical data referenced. Thanks to interested friends, welcome to learn and communicate 🤓
