The energy crisis of 1979 caused by the Iranian Revolution leading to high gas prices around the world resulted in very high inflation rates (7-9%) in most of the Western World. Slow production and poor quarterly reports of companies following the already hot inflation rates forced the feds to tighten their monetary policy and increase interest rates. These events lead to a sharp economic contraction that lasted more than a year.
Today, we are seeing comparable high inflations and a hawkish tone by the feds threatening to raise interest rates soon. This is following two years of dealing with a pandemic, printing money trillions of dollars, and non-stop feeding the market since 2008 that is coming to an end. Now, recently, the market has grown very aggressive toward the growth stocks, especially if they miss their earnings' expectations (NFLX, FB, PYPL, SPOT, SNAP are just a few examples).
The question is, are we getting closer to another prolonged recession?
Today, we are seeing comparable high inflations and a hawkish tone by the feds threatening to raise interest rates soon. This is following two years of dealing with a pandemic, printing money trillions of dollars, and non-stop feeding the market since 2008 that is coming to an end. Now, recently, the market has grown very aggressive toward the growth stocks, especially if they miss their earnings' expectations (NFLX, FB, PYPL, SPOT, SNAP are just a few examples).
The question is, are we getting closer to another prolonged recession?
