Inflation is falling quick sufficient for the U.S. Federal Reserve to chop charges this yr, which can profit the inventory market, in accordance with Tom Lee, the founder and head of analysis at Fundstrat World Advisors.
In a brand new CNBC interview, Lee says there are “many causes” to consider the present inventory market rally will proceed.
“A part of it’s that we do assume that the inflation trajectory is on a glide path decrease than consensus expects. The second is that I believe there’s an excessive amount of warning on the market. You understand, whenever you take a look at prime brokerage borrowings, or principally leverage available in the market, it’s nonetheless beneath the place it was in October 2021.
There’s nonetheless $6 trillion in money on the sidelines, and in our conversations with shoppers, they’re nonetheless fairly cautious, so so long as traders are top-calling and are actually wanting on the world half-empty, I believe shares can nonetheless rise on this wall of fear.”
Lee can be a vocal crypto bull. A couple of month in the past, the Fundstrat govt predicted that Bitcoin (BTC) may surge previous $150,000 within the subsequent 12-18 months.
“We’ve obtained extra seen demand from the spot exchange-traded fund (ETF) and we all know the availability dynamic is bettering with the halving arising which is lower than a month away.
It does assist that the Federal Reserve is changing into dovish, that’s simpler financial coverage.
And I believe from a regulatory perspective we had so many hammers dropped within the final 12 months, actually 18 months, that except it’s going to be worse over the subsequent two years, Bitcoin’s already confronted type of the height of regulatory backlash.”
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