The stock market is wishing and hoping the Fed will pivot — but the pain won’t end until investors panic

MarketWatch/Satyavit Das/2-6-2023

“The ability of asset holders to ride out a prolonged period of higher rates and lacklustre growth remains unknown. As history illustrates, price falls, margin calls, forced selling as investors seek to generate cash, illiquid markets, suspension of redemptions and falls in credit availability can fuel a rapid negative financial cycles.”

USAGOLD note: The above is one of three “p’s” Das believes “may be relevant for 2023.” The other two are “persistence” and “pain.” He says inflation is unlikely to fall to central bank targets (2%-4%) “for some time.” Needless to say, the realization of such could cause turmoil in financial markets around the globe.