Bullish investors have long lived by the well-known axiom of “Don’t fight the Fed”, but they are now positioned in complacent opposition of existing Fed policy and a deteriorating economic backdrop. The first three months of 2023 reflect a standoff between galvanizing stock market sentiment and increasing stresses on the US economy.
The capital markets were anything but ordinary in 2022. Inflation soared, interest rates spiked, energy saw huge price swings, stocks experienced a bear market and bonds endured their worst year since the American Civil War.