Published: Mar 3, 2018 12:56 p.m. ET
Don’t underestimate the impact of rising inflation and higher interest rates
Despite data that continue to show decent economic growth and corporate profits, the stock market is still struggling to retain prior highs set at the end of January.
That’s because lurking behind the headlines are deeper concerns. Chief among these are worries that inflation is on the march, and that tighter Federal Reserve policies could hamstring this rally in a hurry.
This week’s volatility brought on by testimony from Federal Reserve Chairman Jerome Powell on Capitol Hill, featuring a 300-point decline in the Dow Jones Industrial Average DJIA, +1.77% on Tuesday and an even larger decline on Wednesday, is just the latest evidence of uncertainty. And while bullish investors may be inclined to shrug this off as one more brief correction in the constant march higher for equities, it is increasingly clear that the fears around rates and inflation aren’t going away.
In fact, several big-time investors are taking serious notice of these risks. And they are warning that the market is at serious risk of another big drop like the one we saw a few weeks ago — or perhaps, one that’s even worse.
Here are nine Wall Street experts who are urging caution right now, and why:
