Correlation is not causation.
The market certainly could drop by 50% from here but having that occur just three times is a terribly tiny data set.
Also not giving much weight to the decrease in M2. The Fed is intentionally decreasing M2 as a means to combat inflation. More important that the decrease in M2 is the fact that M2 is still WELL ABOVE the historical trend line (and line that is extremely consistent even through recessions).
If we start to seriously break that trendline, that would be of far greater concern than M2 returning to where it should be if not for the Covid largesse.
But the money supply is declining, interest rates are going up, and the related factors are causation.
Smoking tobacco was causation as well.
Don’t get me wrong slightly after the worst of this after mid-2024 the US industrial might will be ratcheting up fast. This is not going to be a horror show…except in the equity markets.