Opera & The Fed

They say that "the opera ain't over 'til the fat lady sings." Similarly, the current bear market ain't over until Fed Chair Jerome Powell pivots yet again. Since the late summer, Powell & Co. have been squawking like hawks about their commitment to bring inflation down no matter how high interest rates must go. They should all be wearing Volcker 2.0 T-shirts.

Today, the S&P 500 fell below the June 16 low of 3666 to a new low of 3585. It is down 25.2% since January 3 of this year. Over this period, the index's forward P/E fell from 21.5 to 15.1, the lowest since late-March 2020.