Probability of an up market in 2023
2023 will not be the first time in 90 years that the stock market follows up an awful year with a bad one. Just like in 1938, 1942, 1975, 2003, and 2009, it will be a year of record returns.
Higher interest rates not lowering interest rates
As I dug into the data this morning, I found a few things that were interesting. First, January’s 0.5% acceleration in the CPI was the most since October 2022 (also 0.5%) and you have to go back to June 2022 for a higher monthly acceleration. The general consensus is that higher rates should lead to lower inflation. This means the 2-year inflation expectations in the market should be declining as the Fed gets more aggressive, but as Lisa Abramowicz pointed out this morning, inflation expectations in the market have actually been increasing over the last 6 months. Lisa Abramowicz @lisaabramowicz1 U.S. 2-year inflation expectations have surged over the past six months, despite tighter Fed policy. 1:16 PM ∙ Mar 2, 2023 86 Likes 35 Retweets Inflation expectations are not the only place where the market is being distorted by this central bank intervention though. Charlie Bilello points out that US Treasury yields have gone from historic lows to 16-year highs in...
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