They say Helen of Troy is the face that launched a thousand ships. Well, the question “have we bottomed yet?” has launched a thousand articles. Or it feels that way, at least.
Sometimes humans have a habit of overcomplicating things, so let’s try to strip this down to the basics here. We have a few factors in play, which make the current economic situation relatively unique (I gave up using the phrase “unprecedented times” after every news anchor on every station used it daily during the pandemic).
- Geopolitical situation (Russian war, oil sanctions etc)
- Fed hiking rates
- Inflation
- The thought that we are “due” a correction following a historic bull-run of over a decade
Geopolitics
Let’s keep this quick. Russia invading Ukraine is still something I’m struggling to get over – a war in Europe in 2022? It’s heartbreaking and sad and shouldn’t be happening, but it also makes it impossible to predict what will happen next in the markets.
The knock-on effect in terms of economic sanctions, potential further Russian aggression and externalities in the commodity and oil markets have pulled markets down. But how is a kid on a laptop meant to predict what Putin does next?
The reality is that nobody knows. Is there a chance that he pulls out sooner than anticipated and all the aforementioned factors magically “fix”? Unlikely, but I suppose it’s possible. Then again, we are now over 100 days into this tragedy with no sign of respite, and it could easily go the other way. Markets are accordingly volatile and jittery, and for the time being I’m operating on the assumption that nothing changes here.
Fed Hiking Rates and Inflation
It’s Jerome Powell’s world, and
