This may hurt
“I wish there were a completely painless way to restore price stability. There isn’t…. Worse pain would come from a failure to raise rates high enough and from us allowing inflation to become entrenched in the economy.”
– Federal Reserve Board Chairman Jerome Powell, during a 12/14/22 news conference after the Fed’s announcement that it is raising a key interest rate by another half a percentage point. Powell said the Fed is likely to continue raising rates in 2023 and he doesn’t foresee any rate cuts over the next 12 months. Read more in this 12/15/22 piece from The Wall Street Journal: on.wsj.com/3Ym6ueW.
Tell it to me straight
“For now, we should expect the Fed to continue to tighten monetary policy, which means tighter financial conditions (e.g., higher interest rates, tighter lending standards, depressed stock valuations). All of this means the market beatings will continue and the risk will intensify that the economy sinks into a recession.”
– Sam Ro, in a 12/14/22 post on his blog, TKer, giving his assessment of Powell’s most recent statements. Read more at bit.ly/3HH3eVz.
The opportunity of a bear market
“… one thing that is undeniable — and I have a century’s worth of data to back this up — market environments like this one are where all of the value creation resides. With today’s lower prices and falling valuations, we are laying the foundation for tomorrow’s success. It may not feel that way in the moment, but that’s why not everyone gets to succeed.”
– Josh Brown, writing on his blog, The Reformed Broker, on 12/6/22. He said what investors do in falling markets is more important to their success than what they do in rising markets. Read more at bit.ly/3UV6sb6.
Good things come to those who wait
“Bear markets are temporary in hindsight but feel like they’ll last forever when they’re happening. Every bear market in the history of U.S. stocks has resolved to all-time highs at some point. Some take longer than others. But patience has been rewarded if you’re willing to deal with the uncomfortable times in the stock market.”
– Ben Carlson, in a 12/11/22 post on his blog, A Wealth of Common Sense. Read more at bit.ly/3PtjBHl.
