Morgan Stanley's chief strategist thinks investors are in for a bumpy ride after they realize there'

[bucolic_frolic]

Morgan Stanley's chief strategist thinks investors are in for a bumpy ride after they realize there's no more Fed rate cut 'heroin'

With inflation falling from its 40-year high in June, investors are betting the Federal Reserve will end its interest rate hiking cycle and “pivot” to rate cuts this year, juicing markets like they did in the past. But some top Wall Street strategists warn that the rosy outlook for stocks may be overly optimistic.

Morgan Stanley’s chief investment officer and chief U.S. equity strategist, Mike Wilson, believes the Fed will keep rates higher for longer, and that corporate earnings will fall.

“Once people realize the Fed’s not cutting rates—there’s no more heroin, so to speak—then we’re going to price the fundamentals, which are clearly deteriorating in our view,” he told CNBC Tuesday.

Wilson argues Fed Chair Jerome Powell will “hold firm” and keep raising interest rates this year, arguing that there is “no incentive” for him to cut rates with the labor market remaining strong and China’s reopening after COVID lockdowns helping to boost inflation.

[Botany]

1. So the big oil companies made money hand over fist by jacking up their prices which fueled ....

... inflation and so the Fed raised their interest rates to control the inflation which was caused by big oil,
Saudi Arabia, and Russia? And the raising of the interest rates will let the rich get even richer because
they have the money and know how to game plan their investments and portfolios to make money in a
market w/high interest rates. aka the rich will get richer.

[Meadowoak]

2. +1

[Warpy]

3. Worse, voters are starting to realize tax cuts for billionaires are a fucking scam

along with depressing wages to control inflation and the rest of the snake oil the GOP and our own conservatives have peddled for decades in the sole name of pumping up the stock market. One hopes our own party is turning a philosophical corner that will allow them to repudiate this horse shit loudly and at length since it led to the destruction of their own social contract with working people.

About the only trick the fiscal right wingers have left is gutting social security and Medicare in order to use those funds to keep pumping up the stock market. They'll do it, too.