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The Case Of The Missing Stock Selloff
We "should" be looking at the smoldering wreckage of a meaningful equity drawdown right about now.
This week's US CPI release was about as unequivocal as macro releases can be in the context of our hopelessly ambiguous, post-pandemic, war-era macro regime: US inflation's not tamed.
True, it's not raging anymore, but it's not withering in the face of "restrictive" Fed policy, either. Likely because Fed policy isn't especially restrictive, or anyway not as restrictive as officials were inclined
The prospect of Economy Running Over-Warm + Fed Won’t Raise Rates = Porridge Just Right for equity investors in the short term . . . now we need earnings and econ data to stay consistent with that over-warm economy. If not, then the porridge could start tasting hold-and-cold at the same, which is more like icky Stagflation Soup than tasty Hot and Sour Soup.