What is the capital market panic for?

Upstart
WiYt42

Go to company page Upstart

WiYt42
2d 9 Comments

Looking at fed rates and employment rates back in 2019, even with a 100 bps increase in fed rates, the overall rate by the end of year is still lower than 2019.

Not to say unemployment rate now is as low as 2019…. Yeah some external factors like wars, supply chain, and Covid are still there but I feel a bit confused of what the stock market is panic for. We’re just getting back to 2019 after all. #stockmarket

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TOP 9 Comments
  • It's not about the rate, it's the implication that the Fed printer won't be working for a while.
    2d 1
  • Exactly. What made stocks worth 2x what they were in 2019? Nothing.

    Result of massive covid stimulus and Fed money printing. And now it’s over.
    2d 0
  • Amazon
    Iced

    Go to company page Amazon

    Iced
    There weren’t talks of recession in 2019
    2d 4
  • Meta
    rhombus_

    Go to company page Meta

    rhombus_
    (1) valuations now are much higher than in 2019
    (2) fed funds rate expectations are that it will surpass (a bit) the 2019 level in 2023
    (3) CPI in 2019 was around 2% which is the ideal target. Given where we're at now, there are lots of other ramifications and risks of very high inflation if it doesn't come down quickly. The fed has in the past intentionally brought about a recession and they are under pressure to reinstate their credibility. In other words, there is risk the rates could go higher more and faster if inflation doesn't come down
    (4) finally, unrelated to the fed, there could have just been too much enthusiasm for the growth in 2021 that resulted in high valuation for growth stocks. If those are not as sustainable, then valuations have to come down
    2d 0