Commentary
Jerome Powell isn’t Paul Volcker, and this isn’t 1982. As of late, market analysts are stumbling all over themselves, trying to outdo each other on the “why this time is different” related to the Federal Reserve’s ongoing inflation fight. One of the more interesting comparisons came from the always uber-bullish Tom Lee of FundStrat.
He argues that the market setup is similar to what investors experienced in August 1982. Then, a strong rally in equity markets took place as the Fed began to pivot away from its inflation fight. In the summer of 1982, the U.S. economy was in recession, and then-Fed Chair Paul Volcker had not yet signaled whether the Fed would ease up in its campaign to slow inflation. ‌In October that year, Volcker signaled the Fed could temper efforts to slow inflation….