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Market optimism in dark times

There has been general concern among Americans about the prospects for markets and the economy, with high inflation and talk of a looming recession on the horizon. However, There could be light at the end of the tunnel when the worst of the sell-off is in sight. At least that’s what Mark Zandi, chief economist at Moody’s Analytics, thinks.

Why is he optimistic? Though the stock market has lost 20 percent of its value and plunged into a bear market, the return is unlikely to match double-digit gains, he says modest mid-single-digit figures seem likely. The decline in market value was driven by Investors expect higher interest rates to fight inflation, but now the Rate hikes were internalized.

There will continue to be market volatility when stocks rise and fall, but should the Federal Reserve “just raise interest rates as expected, and the economy is capable of it avoid a real downturn, Stock investors will stop selling, and The bear market will end.”