A Market Selloff Triggered By A Fed Policy Error
The Fed made a significant policy error last week by deciding not to cut the Fed Funds rate and the stock market is now responding to that error via the selloff we have seen over the past week. Unfortunately, this policy error is nothing new. Throughout history, the Fed typically waits too long to begin reducing interest rates after inflation has already abated and they seem to be on that path again.
2023 Market Outlook: A New Problem Emerges
While the markets are still very focused on the battle with inflation, a new problem is going to emerge in 2023 that is going to take it’s place. The markets have experienced a relief rally in November and December but we expect the rally to fade quickly going into 2023.