The Fed did a U-turn in 2019 under intense political pressure. It was a mistake because the economy wasn’t slowing much and there was no market panic. The political pressure won’t happen again…I hope.
Fed Chair Jerome Powell is laser-focused on reducing inflation even if a recession results from raising the fed funds rate and holding it for a long time. He won’t back down unless there is a financial panic. Nobody expects that because Powell has been so transparent for years that the market won’t be blindsided.
Because of this, the likeliest scenario is a steady prolonged drop in the market. I don’t think it will be as extreme as 1968 to 1982 but it will probably take a year to reach bottom as it did in 2002 (after the 2001 dot-com crash and recession).
You may be too young to remember this.
Wendy