Latest Fed DSGE model says…

Latest Fed DSGE model says 80% chance of a recession with negative DGP growth starting from end of July 2022 through 2023.

Latest report

My take? We are not at the bottom by a long shot.

CPI report July 13 pre-market release. Even if we are down a bit or equal, I believe the Fed will still raise .75 and the markets will go down. Higher and 1 is on the table for sure and the markets will swoon. No way inflation is a lot lower. No way. So, I see no upside potential because of rising Fed rates until inflation is under control as per Powell.

“”Fed Chairman Jerome Powell said Wednesday that the central bank is "strongly committed" to bringing down inflation and can do so with its monetary policy tools.
That means higher interest rates until "compelling evidence" emerges that inflation is coming down.””

Strongly committed means he will raise them even if it hurts the markets.

Compelling evidence means more than just 1 data point that inflation is trending down. So even IF the July 13 report is lower, he will still go .75 IMO.

Sure your gonna have bear market rallies but you will be fighting the Fed. Don’t fight the Fed.

The average bear is around 34%. Thats S&P500 around 3150. We are at 3900.

Also the Shiller PE is about 29. The mean is about 17.

So…..
DSGE model doesn’t look good.
Inflation high.
Fed raising rates.
Shiller PE high.
Oil still above $100 and no pivot by Biden (yet).
Ukraine war with no end in sight and the politics/policies behind that.
Federal and Global debt in outer space.
US consumer debt out of control.

Sorry. Just don’t see the market trending up until inflation is under control. I’m not a buyer yet because no telling how ugly it could get. 34% down is just the average mind you.

Buy consumer staples because everyone has to eat.

And I am not a doom and gloom investor. I would love for the market to smoothly march upwards.