Macro Dashes - Higher Rates For Longer And Continuing QT Could Pressure Stocks


  • In late 2021, I warned that the Fed was a big risk to stocks in 2022 and projected a bear market with a roughly 20% loss on the S&P 500.
  • Today, many in the market believe that the Federal Reserve will lower rates by the end of this year and thus are bidding up stocks.
  • As I've repeated, it's not a quarter point here or there investors should be watching, but the level of quantitative tightening.
  • The Fed must watch OPEC and Russian actions that impact energy, as well as, the Chinese reopening, to see if inflationary pressures will continue to subside or resurge.
  • In a higher for longer interest rate regime with quantitative tightening pulling liquidity from the financial system, stocks will continue to face major challenges.
  • This idea was discussed in more depth with members of my private investing community, Margin of Safety Investing. Learn More »

World Map on digital display


In last week's Federal Reserve, post-meeting press conference, Chairman Jerome Powell said: "...and we will need to keep rates higher for longer..."

That is in the face of a stock market trading crowd whose narrative is that the

BLS Inflation Components

Inflation Causes ((BLS))

Global Aging

Global Aging (Our World In Data)

Chicago Fed Adjusted FCI

Chicago Fed Adjusted FCI (Chicago Fed via TradingView)

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This article was written by

Kirk Spano profile picture
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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I own a Registered Investment Advisor - however, publish separately from that entity for self-directed investors. Any information, opinions, research or thoughts presented are not specific advice as I do not have full knowledge of your circumstances. All investors ought to take special care to consider risk, as all investments carry the potential for loss. Consulting an investment advisor might be in your best interest before proceeding on any trade or investment.

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