Throughout January, the stock market soared as investors began to price in a “soft landing” for the economy—predicting the Federal Reserve would be able to tame inflation without sparking a recession. But Lisa Shalett, Morgan Stanley Wealth Management’s chief investment officer, warned Tuesday that “looking through the fog” to a new bull market is a bad idea.
After the U.S. economy added more than half a million jobs last month, pushing the unemployment rate to a 53-year low of 3.4%, and retail sales jumped 3%, surpassing economists’ expectations, Shalett fears the Fed will have to keep interest rates “higher for longer” to cool the economy and quash inflation.
