Analysts have conflicting views on the outlook for the U.S. economy and markets, with some warning of an imminent recession and others suggesting a possible soft landing. Meanwhile, one analyst points out that a bear market has never ended before a recession set in.
what happened: according to Ed CrisoldChief U.S. Strategist at Ned Davis Research, The U.S. Economy Still recessionwhich means the market has not reached the bottom of the bear market.
But as chairman of the Federal Reserve Board Jerome Powell The Fed has repeatedly said it will continue to tighten quantitatively until central banks keep inflation under control. Chrisold said a bear market usually ends 14 months after his last rate hike by the median, and the Fed is expected to raise rates again on March 22, so the bear market is likely to end on his suggests that it could last until 2024.
Meanwhile, the chief strategist said the stock market had started pricing the Fed and the economic cycle earlier than usual.
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Mr. Clissold points out that St. Louis Fed President James Bullard On Wednesday, he thinks the market has overestimated the likelihood of a recession.
“I think the market is overestimating a recession in the second half of 2022, overestimating a recession in the first half of 2023, and probably overestimating the likelihood of a recession in the second half of 2023,” Bullard said Wednesday. said in an interview with CNBC.
The bear market started 2.3 months before the first rate hike, and if the recession pushes into late 2023 or even 2024, there is no precedent for a bear market to last that long, according to Crisold.
Furthermore, Crisold said the 2022 non-recession bear markets fit a typical cycle as the US has been in an average of two bear markets per recession over the past 60 years.
As fears of an imminent recession fade, the strategist says the market will enter what is known as a post-echo bull market until a recession finally strikes. acknowledged that it could be shorter than
Finally, I explained that when a recession hits, the post-recession bull market is the strongest part of the business cycle because it coincides with economic growth. Crisold said the economic downturn has also led to fears of a double-dip recession, which he says has only happened once in the last 60 years.
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