As the Fed finally starts to deal with inflation, the market took note this month and seems to be selling off across the board. The expectation is that the economy will slow and as they say in the investing world, “don’t fight the Fed.” There isn’t a silver bullet that can keep businesses booming, paychecks rising and inflation under control forever. Something needs to give, especially when our government continues to expand, spend and add to deficit spending and debt.
Preceding the Great Recession, we saw similar patterns. Businesses were hiring, housing prices were booming and oil prices were rising (see April 23, 2008 post below). We should know better, but smart people still believe the good time will keep going. True it is hard to predict the end of a bull market, but history tells us that it will end. Let’s hope for a softer landing, but don’t be surprised if we have a crash and a recession (hopefully without stagflation ).