The Battle of Midway Moment
In this week’s market update, we are going to talk about the importance of the Federal Reserve’s June meeting and whether this will go down as a Battle of Midway moment in the Fed’s war against inflation. Until June, the Federal Reserve was a hesitant inflation fighter resorting to a slow and steady approach to rate increases when a more aggressive approach was needed. The Fed made clear during the June meeting that the gloves were coming off with a historic 0.75% rate increase and made it clear that the FOMC would not rest until inflation was subdued. Since then, we have seen commodities collapse, interest rates drop, and inflation expectations collapse, accompanied by a short-term bottom in stock prices and riskier assets such as Bitcoin.
- June 15th appears to have marked a turning point in the war on inflation
- We see economic growth is slowing, and therefore we focus on growth stocks over value
- It seems the stock market is climbing up a wall of worry, but we want to see more panic buying to increase confidence a true low is in
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