"Soft landing" scenario strengthening. 1980s inflation broken when "goods" inflation peaked. Consumer discounts ahead. Target confirms. Manheim Index shows Luxury + Full-sized tanking.

The Fed doesn't want every stock to fall, but they want to tighten financial conditions

Investors tell us they don't want to "fight the Fed" and as long as the Fed is tight, they will not touch equities. This is intuitively sound, but here are some issues with this thinking:

  • The Fed is fighting inflation, and probably has White House consent to drive a recession, if this is needed
  • Inflation, however, could cool faster than Fed and markets anticipate = dovish turn

The Fed is trying ...

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