Either stocks have permanently decoupled, continuing exclusively within the realm of central bank omniscience that has been rebuked time and again, or there will be a Period G where full harmony is restored; that is everyone’s greatest fear.
Ever since 2011 the markets have increasingly played out several stages of dislocation, as is well shown by the graph above. It looks like the Federal Reserve’s forecasts and the US stock market are the last holdouts as the rest of the markets are already reverting to a different reality. The Federal Reserve’s current forecasts are once again completely out of line with the US bond market. The US bond market has by far the better track record.
This note is very aligned with my December 27 post on the same subject. The dislocation has become hard not to notice.