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You’ve just conflated an interest rate tightening cycle with a market crash. The fed’s intent is not to crash the economy. While recessions tend to follow hike
by amscanne 4y ago
You’ve just conflated an interest rate tightening cycle with a market crash. The fed’s intent is not to crash the economy. While recessions tend to follow hike cycles, I believe that markets also tend to post (small) positive gains over the following two years. To me it seems a lot more likely that “the crash” was indeed blowing off froth, and that there may some recessionary period and growth will be subdued for a while (the actual tightening cycle), reflecting that we’re in neither 2000 or 2008. Either way, I agree that time will tell.
- beebmam 4y agoI think it's really quite weird that people talk about the current financial situation without ever mentioning the massive disruption and decoupling that globalization is undergoing right now. Russia has essentially been excised from the world's economy, and China's lockdowns and other political actions have spooked virtually all foreign investors and business operations in that country. And there's serious consequences for everyone. This inflation crisis is just one of those consequences.
- gmm1990 4y agoyeah it looks like a lot of market valuations are discounting the China decoupling risk. Maybe unlikely but I was surprised by the complete pullout from Russia.