The 2023 stock market rally looks wobbly. What’s
next as investors prepare for longer inflation fight.
https://www.marketwatch.com/story/the-2023-stock-market-rally-looks-wobbly-whats-next-as-investors-come-to-grips-with-a-further-rise-in-interest-rates-bdb3e1a3
https://www.marketwatch.com/story/the-2023-stock-market-rally-looks-wobbly-whats-next-as-investors-come-to-grips-with-a-further-rise-in-interest-rates-bdb3e1a3
Record-breaking global bond rally crumbles as fresh
inflation fears grip investors
https://www.ft.com/content/b287997b-a048-426c-bab3-9a6a97486c17
Are markets right in expecting an ‘immaculate
disinflation’? BY VIVEKANAND JAYAKUMAR - 02/06/23
https://thehill.com/opinion/finance/3844349-are-markets-right-in-expecting-an-immaculate-disinflation/
All in all, it appears that both the stock and the bond markets may be getting ahead of themselves by assuming that the worst is over. Far too much is now riding on expectations for an early Fed pivot. Some analysts have also argued that stock investors may be ignoring negative operating leverage and a possible squeeze on profit margins.
Given the ongoing uncertainty about the future pace of disinflation, and potential risks involving premature easing of financial conditions and stickiness in services inflation, it may be in the interest of market participants to avoid excessive exuberance.
It is too early to claim victory in the inflation battle or even to rule out a resurgence in underlying inflationary pressures — that was one of the key takeaways from the experience of the 1970s.
https://www.ft.com/content/b287997b-a048-426c-bab3-9a6a97486c17
https://thehill.com/opinion/finance/3844349-are-markets-right-in-expecting-an-immaculate-disinflation/
All in all, it appears that both the stock and the bond markets may be getting ahead of themselves by assuming that the worst is over. Far too much is now riding on expectations for an early Fed pivot. Some analysts have also argued that stock investors may be ignoring negative operating leverage and a possible squeeze on profit margins.
Given the ongoing uncertainty about the future pace of disinflation, and potential risks involving premature easing of financial conditions and stickiness in services inflation, it may be in the interest of market participants to avoid excessive exuberance.
It is too early to claim victory in the inflation battle or even to rule out a resurgence in underlying inflationary pressures — that was one of the key takeaways from the experience of the 1970s.