Even if the Fed adopts a best-case scenario, the market has a big problem: traders don't know where we are in the economic cycle.
very tricky Federal Reserve meetingEven if the Fed adopts a best-case, stay-the-course-on-tapering-and-rate-hikes scenario, the market has a big problem: traders don't know where we are in the economic cycle.Inflation hawks are on the rampage. Inflation is running above the 2% target, which is what the Fed wants.
Answering that question will determine what type of stocks to own, or even if stocks are desirable at all. Are we still in the early stages of a broad economic expansion that will go on for a year or more, as some bulls have claimed? Are we in the middle stages? Or are we in the later stages, where growth will quickly decelerate?
All that is hard enough to figure out, Arone says, but "when you add in the distortive effects of fiscal and monetary policy coming out of the pandemic, I don't think anyone knows where we're at."
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