It's funny to read that influencers became bears in December 2022. This is very good, since the "bears" should have become in December 2021, as the head of the Fed and the US Treasury Secretary warned.
And now you need to start preparing for the next phase of the cycle.
Forecast for the first half of 2023:
- The Fed adds another +50 bp on February 1 and that's it. Alternative — 25 bp in January and 25 b.p. in March.
- In March, inflation consolidates BELOW 4.5% and continues to decline. GDP and economic activity remains sluggish, employment is stimulated by government, primarily military orders.
- Load on state service. debt in such conditions is excessive, which means that from the April forum of the IMF, words will begin to sound about the need to lower the rate, which will begin by June 14 or even May 3. Charts of rate dynamics show that a sharp increase in the rate almost always ends in a sharp decrease in the rate, in fact, without a break.
Conclusion: I recommend to be extremely careful in terms of determining the pivot point. Just like a year ago, the new phase of the cycle may be much closer than you think.
Author: Novel in macroeconomics