The Blubber

Per Business Insider

The founder of "The Bear Trap Report," Larry McDonald, shared his thoughts on the stock market, expecting it to crash in 60 days. He expects a 30% drop in the next two months as investors were starting to favor bonds over equities.

In a statement with Fox News, Larry McDonald shared his set of 21 systemic risk indicators, highlighting how the Federal Reserve rate hikes could see it go from zero to over 4.5% in a year as they try to avoid historic inflation.

In a statement with Fox Business, McDonald shared how the market was experiencing a notable withdrawal of capital from middle-class families. He specifically noted that middle-class families were severely affected.

McDonald: "The withdrawal of capital from the middle-class families is so spectacular... The middle-class families are getting hammered here, and so the consumer pressure's violent."

The founder estimates that a 1% increase in rates could increase in an increase of costs for middle-class families by $50 billion. McDonald shared his reasons as to why he believes there to be a market crash in the next two months.

McDonald: "There are really massive cracks under the surface, and that's why the market probably goes down 10%, 20%, maybe 30% in the next 60 days,"

Bank of America expects the next stock bull market won't happen until the Fed decides to bail off the US government. The bank says debt is expected to reach $21 trillion in the next ten years.

Powell shares how there is new data that suggest that the ultimate rate levels will likely be higher than previously expected. Powell said that the newer data show that the economy was stronger than previously expected and that faster tightening was warranted.

See flow at unusualwhales.com/flow.

Other News:

• The next bull market in stocks won't kick off until the Fed is forced to bail out the US government, Bank of America, $BAC, has said
• Powell: New data suggests the ultimate level of rates is likely to be higher than previously anticipated

Resources:

Business Insider

Fox Business on YouTube