The Fed Is Making a Mistake—and the Inventory Market Will Pay the Worth

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All of us make errors—however the Federal Reserve could also be making a much bigger one than most. That might imply one other troublesome yr for the inventory market in 2023.

These issues had been entrance and middle this previous week, following the Federal Open Market Committee’s December assembly. The Fed didn’t do something to shock the market because it raised the federal-funds price by a half-point, simply as everybody anticipated, and recommended a terminal price of simply over 5%, a degree traders had slowly come round to. However the dot plot mirrored the Fed’s perception that charges must go excessive and keep excessive, whereas Chairman Jerome Powell continued to strike a hawkish tone.

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