The Macro-Policy Path To SPX 6350
Everybody knows what could go wrong, right?
If not, allow me. Monetary policy's "long and variable lags" -- dismissed by bulls as anachronistic, not applicable this cycle or both -- could come back to exact their revenge, pushing the US economy into recession and torpedoing corporate profits. So, a hard landing.
Alternatively, ongoing economic resilience could prevent core inflation from receding to target, prompting the Fed to restart rate hikes on the way to... I don't know. On the way to so
It is my understanding that Treasury issuance is shifting to shorter maturities. If so, inflation will have less of an effect for depreciating debt than in the past.
At 6350 (in 2024), I will be able to recalibrate my dreams……
I know I shouldn’t ask (be greedy), but what is the “Bull case II dream scenario“?
Another +1
Though my bet is that it has something to do with AI being deployed fast enough/labor inflation being weak enough to not even create a tension between fiscal and monetary policies…