I am certainly not wanting to delve into politics…but, regardless of whoever is in power, Can the FED really afford to cause a significant market upset in the pre-election and election year?
I guess the market can easily lose 5% from here, and worst case, say 10% fall…but would the powers that be allow the FED to just cause that mayhem and let it be just like that.
In how many pre-election and election years has the stock market suffered a loss?
From what I could gather, it looks the data doesn’t really support stock market loss during the pre-election/ election year?
More important than a market downturn would be an economic downturn – that soft landing or hard landing we have been talking about for over a year. Particularly if inflation picked up again.
Down economy 1991-1992. I know because we were making table sign holders for Anhauser-Busch. We were busy the entire winter, the only group in the company to run all winter. All other groups were closed for the winter (which is normal for the industy. Close circa late Oct/early Nov and restart late April/early May).
History tells us that the Fed supports the Party in Power with an accommodative Federal Reserve policy (interest rate increases are done absent a spike in inflation.)
The last 2 years of a President’s Term are usually a bull market. You need to screw up pretty badly to get a downturn (e.g. 2007-2008).
The FED’s timing is excellent. The general is not underway. The primaries will be over exactly when the bull economies and markets begin.
If the FED waits then this washes up on the fall of 2024. The inflation we are trying to put out puts out the factory buildout as production could have started in mid 2024 and beyond but the economy is fighting inflation with higher FF rates.
Now is the time to purge this economy’s woes.
Just promising tax cuts only works with people who are desperate to hear another 42 year old lie. Most of them are on their way six feet south.
And yet we’ve just listed four of the last 16 elections where it happened. Certainly not unusual and given that there are four years in a cycle, 25% seems what one would expect from randomness.