HomeFinance NewsFinanceStock Market on Brink of Collapse: Expert Warns of Dire Consequences

Stock Market on Brink of Collapse: Expert Warns of Dire Consequences


Stock market in a ‘very dangerous’ position as jobs and wages run hot, fund manager says


The U.S. stock market is seen as being in a precarious position, as strong economic metrics including job growth and consumer spending suggest that the Federal Reserve’s interest rate adjustments have not had the desired effect.

This has led to worries that the Fed could be pressured to maintain higher interest rates for an extended period, potentially leading to a scenario where more corporations are forced to refinance their loans at higher rates, which may hurt the stock market.

The strength of the U.S. dollar in the face of tighter monetary policies has been highlighted, with wage and growth metrics continuing to demonstrate robustness.

The article adds a historical perspective by comparing the current economic climate with that of 1964-1981, a period of high economic activity yet limited stock market growth due to high inflation and strict monetary conditions.

The recent resilience of the stock market, despite warnings from the Fed about rate changes, is attributed to strong performances by tech firms and investor optimism.

Within a broader range of market predictions, there remain opposing perspectives.

A few professionals maintain a more confident prediction of a market rebound, crediting recent data that indicates the Fed’s efforts are effective.

  • Overall sentiment: negative
  • Positive

    “Should strength in the jobs market, consumer sentiment and household balance sheets remain resilient, the Fed may have to keep interest rates higher for longer.”

    “However, some strategists have been keen to point out that the upside from recent data means the Fed’s efforts to engineer a “soft landing” for the economy are coming to fruition, and that a recession is seemingly no longer in the cards, which could limit the downside for the broader market.”


    “The U.S. stock market is in a “very dangerous” spot as persistently strong jobs numbers and wage growth suggest the Federal Reserve’s interest rate hikes have not had the desired effect.”

    “Smead, who has thus far correctly predicted the resilience of the U.S. consumer in the face of tighter monetary policy, told CNBC’s “Squawk Box Europe” on Monday that “the real risk this whole time has been how strong the economy has been” despite 500 basis points of interest rate hikes.”

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