Stocks didn’t crash for a reason so simple it can be easily overlooked by market newbies: the role of expectations. The professional traders who dominate equity markets are not, by and large, frantically trading in response to CPI numbers the morning they’re released. Instead, they’ve been trying to predict the CPI numbers for weeks and trading on those projections ahead of the actual numbers. By the same token, the Fed has already announced its plans to raise interest rates and cut its bond balance sheet this year, tightening the money supply and likely hurting stock performance.
Bitcoin, Inflation and the Expectations Game
