Now I certainly cannot predict the stock market over short or medium term. However the fed has signaled they are serious about controlling inflation. The market is predicting 4 to 6 rate hikes this year . In addition the Fed is going to reverse their policy of buying bonds and begin unloading their huge stock of them they bought to inject liquidity in the market and keep rates low. Powell has been reappointed. He is not beholding to Biden.
Many investors and 401 k holders have benefited from this easy money since the Great Recession, the last time there was a huge sustained bear market in stocks.
The fed has a dual mandate ..low inflation and near full employment. There job is not about equity prices.. in 2018 they raised rates near end of year and Market fell 20% in a month. They stopped and went back to being accommodative. At the time there was no inflation. The market recovered quickly.
So most people have been looking at their retirement fund statement and seeing it go up every month. Last year 18-30% or more for those thinking high beta tech was safe. When they see that nest egg go down 20, 30; or maybe 40% this year (not a prediction but certainly not unlikely) , while having 5$ per gallon gasoline as oil hits 150, who will these folks blame? The bumbler in chief. It will add to the depths of poll numbers and send democrats outside of BLM/Bernie loving districts into a total panic.
Many investors and 401 k holders have benefited from this easy money since the Great Recession, the last time there was a huge sustained bear market in stocks.
The fed has a dual mandate ..low inflation and near full employment. There job is not about equity prices.. in 2018 they raised rates near end of year and Market fell 20% in a month. They stopped and went back to being accommodative. At the time there was no inflation. The market recovered quickly.
So most people have been looking at their retirement fund statement and seeing it go up every month. Last year 18-30% or more for those thinking high beta tech was safe. When they see that nest egg go down 20, 30; or maybe 40% this year (not a prediction but certainly not unlikely) , while having 5$ per gallon gasoline as oil hits 150, who will these folks blame? The bumbler in chief. It will add to the depths of poll numbers and send democrats outside of BLM/Bernie loving districts into a total panic.
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