FOMC could lead to a strong bull run. This scenario would line up well with the Fed's schedule for rate hikes and cuts. The most bullish scenarios now have us with a 5% terminal rate by about April, then no rate cuts until late Q4 2023 to Q1 2024. This long plateau is typically when markets have peaked in the past, or upon the first cuts. As seen here:
This pattern may occur slightly later for the start date and slightly earlier for the end date. It may unwind down little lower first. Perhaps, JUN 2023 may be lower than today... Then it may head up a little for the NOV 15 2023 over-consumption phase. The factories begin the over-consumption phase around SEPT 15 to OCT 15 to make sure it's available for the over-consumption phase. So JUN is one of the weakest points based off of the over-consumption phase (massive growth phase). War spending should increase the growth rate too by JUN, so it will be a little tricky to measure in Q2 2023 (depending on how much war-related growth occurs in factories).
day0
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The chart below is based off of the idea of: 2023 recession begins & war increases; 2024 bad recession & bad war (however & very interesting: more war can increase the growth rate - as long as there is electricity); & then a 2025 "what if something very harsh occurs by JUN to DEC 2025 hypothetical case". DISCLAIMER: THIS IS A HYPOTHETICAL CASE FOR A WORSE CASE (hopefully worse case never comes to play, so this can be a "conservative bottom bar" for this chart directly below: Two years of unwinding:
MarlosClock
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@day0, yeah I could see something like that too. It's good to imagine all the probable scenarios and judge against them.
day0
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@MarlosClock, The chatter (online) of "2 years of unwinding" seems to be increasing. And 2023 expected to be a very harsh year (economically as in recession). S&P has been falling all year, so it's very possible that it will fall all 2023 and all 2024 with some increases a long the way.
@MarlosClock, Yeah... It took a little longer for ww3 to get going than many predicted. Now... the time is running lower and lower. 2024 is 80% chance of recession. If it skips 2024, then 2025 will be 99% chance of recession.