He pointed to the fading possibilities of changing the Fed’s strict policy
Morgan Stanley analysts pointed out that the high US stock prices give a warning signal that the Standard & Poor’s 500 index may decline by up to 26% in the first half of this year to 3 thousand points.
Analysts added that the latest data issued by the United States indicates that the US economy is able to avoid recession, but it also indicates the fading possibilities of changing the Fed’s tightening policy at any time soon.
The bank, “JP Morgan”, warned of disappointment that investors might encounter in stocks, especially after they became very optimistic about the economic outlook.
A team led by Mislav Matica wrote in a note, “It is too early to say that recession has become an unthinkable possibility, after the aggressive monetary tightening policies of the Federal Reserve, especially since the impact of monetary policy on the economy could be delayed from one to two years.” They said the central bank is likely to focus solely on responding to a more negative macroeconomic backdrop than markets currently expect.
On Monday, JPMorgan strategists wrote: “Historically, stocks don’t usually bottom out before the Fed cuts further, and we haven’t seen a bottom before the Fed stops its tightening rounds. The damage has been done, and from It is likely that the repercussions are still ahead.”
