Uncertainty on Wall Street certainly looks to be off the charts. In fact, however, economic uncertainty currently is no higher than its historical average. In past years when uncertainty was at or near current levels, the stock market produced middle-of-the-road returns.
It’s entirely understandable why uncertainty seems to be a lot higher than average. For starters, no one has any idea whether the economy is headed into a recession; even the Federal Reserve doesn’t know. Likewise, none of us knows whether the Fed will continue raising rates at its subsequent meetings—or hit the pause button. Opinion about inflation is also polarized, with some insisting that inflation will fall markedly over the next year, while others are confidently predicting that it’s headed back up. If that weren’t enough uncertainty, there’s also the prospect of a government shutdown if Congress is unable to agree on a budget for the fiscal year that begins on Oct. 1. And then there’s the huge geopolitical uncertainty over the possibility the Ukraine war will go nuclear or China invades Taiwan. While this list of current risks seems overwhelming, we need to remember that uncertainty always seems to be off the charts — whil …
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It’s entirely understandable why uncertainty seems to be a lot higher than average. For starters, no one has any idea whether the economy is headed into a recession; even the Federal Reserve doesn’t know. Likewise, none of us knows whether the Fed will continue raising rates at its subsequent meetings—or hit the pause button. Opinion about inflation is also polarized, with some insisting that inflation will fall markedly over the next year, while others are confidently predicting that it’s headed back up. If that weren’t enough uncertainty, there’s also the prospect of a government shutdown if Congress is unable to agree on a budget for the fiscal year that begins on Oct. 1. And then there’s the huge geopolitical uncertainty over the possibility the Ukraine war will go nuclear or China invades Taiwan. While this list of current risks seems overwhelming, we need to remember that uncertainty always seems to be off the charts — whil …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]