Why a jump in economic growth could be the stock market's nightmare scenario

Published On Sep 25, 2024, 4:50 AM

The article discusses a warning from economist Steven Blitz, who argues that an unexpected rise in US economic growth could pose a significant risk to the stock market. He suggests that a scenario where the economy does not slow down, termed a 'no landing' scenario, might lead to renewed inflation pressures and a potential rate hike from the Federal Reserve (Fed). Blitz believes that the current low interest rates may keep the economy too hot for too long, prompting the Fed to raise rates sooner than markets anticipate. This situation could disrupt investor expectations, especially as many are hoping for a soft landing for the economy.