Its never over until it is, but the jury is out as to how bad it could get.
This is a multi-year story to the downside if all the hidden sh*t implodes.
Staying on the sidelines means at best missing out on any final Melt-up, the price to pay for staying safe.
Melt-up as the connotation suggests will be transitory followed by the inevitable Melt down.
Now we have the Master of Chaos fast tracking that eventuality, rendering all efforts by the Fed to balance the rope entirely impotent.
The Fed had been instrumental in keeping markets away from implosion, it was able to fend off near collapses from the UK gilts crisis, the Credit Suisse crisis, the SVB crisis and navigate through Biden's fiscal profligacy that resulted in near 10% inflation. The Fed is only responsible for monetary policy but the Govt made it tough because they undertook policies based on political motives which it can't control. And you'd wonder what more magic can Powell do, because this time around, he has to contend with higher inflation, no thanks to Trump's tariffs and higher unemployment, no thanks to Doge and Govt spending cuts.
