The Fed focused on labor costs to reduce inflation, which decreased from 9% to 5%. In Europe, inflation is still between 6.9% and 7%, indicating that the Fed has outperformed European central banks.
Reducing inflation from 5% to the targeted 2% will not be that easy.
Earnings will decline more than expected due to inflation and other factors, which will lead to a persisting bearish market.
The decline in oil prices is good news in this regard, and it stimulates spending.
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