Key Takeaway: Risks to the economy are rising, though a recession is not a foregone conclusion at this point. Barring a dramatic and unlikely abatement in inflation pressures, the path of least resistance for interest rates is higher than the market is accounting for at this point. Rally attempts have been volatile but, so far at least, short-lived and as longer-term trends turn lower, many investors are dealing with an unfamiliar (and uncomfortable) environment. While moods have soured, positions are little changed. Overall these are the conditions under which bear markets can die and bull markets be re-born. The evidence at this point does not suggest that turn is at hand.
