Conditions Are Ripe for a Deep Bear Market

Inflation means that falling stock prices are seen merely as a side effect of tighter monetary policy, not a reason to invoke the “Fed put” and rescue investors.
The common factor in the 20% drops was the Federal Reserve. Each time, the market bottomed out when the central bank eased monetary policy, with the stock market’s fall perhaps helping push the Fed to take the threats more seriously then it otherwise might.
Most important, in 1974 the Fed kept raising rates even as a recession took hold because it was running to catch up with inflation. The result was a horrible bear market interspersed with soul-destroying temporary rallies, two of 10%, two of 8% and two of 7%, each snuffed out. It took 20 months before the low was reached—not coincidentally, when the Fed finally began to get serious about cutting rates.
To be clear, this article is not predicting a bear market, just saying that conditions are almost optimal for one to occur. The market can of course stay irrational longer than you can stay solvent if you bet against it. Regardless, Don't Fight the Fed.
$S&P 500 Index (.SPX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Nasdaq Composite Index (.IXIC.US)$ $Dow Jones Industrial Average (.DJI.US)$ $Apple (AAPL.US)$ $Tesla (TSLA.US)$