Summary

• Monetary policy tightening has often occurred in the later stages of market cycles, which is why inflation expectations matter for the next Federal Reserve move.
• Oil prices dropped dramatically, inflation breakevens have followed, and inflation pressures have faded.
• The Fed’s most prudent course, in my view, is patience. Based on current conditions, the next move may be easing, not a hike.

By Brian Levitt, Chief Global Market Strategist and Head of Strategy & Insights

I’m often asked when I would finally turn negative on financial markets. My answer rarely changes. It’s when the Fed raises interest rates and