I’m very skeptical we’ve seen the bottom. Anything is possible, but if QT stays on autopilot, I have a hard time seeing sustained gains. We haven’t had a real blowout in credit spreads yet or a crescendo of equity selling. Very orderly year. This feels a bit like 2000-2002 so far. Protracted bear with a lot of big countertrend rallies and false starts. Markets also tend to bottom after the Fed goes into an easing cycle, not while they’re still hiking. I don’t think they’re going to back down from talking tough on inflation either. Powell doesn’t want to be Burns reincarnated.
I’d also add that crushing economic activity through hikes and a strong dollar suppresses oil demand and may be a sneaky way for our government to undermine Russia’s ability to fund its war.