After a nearly yearlong campaign against inflation that helped tank markets in 2022, Federal Reserve Chairman Jerome Powell uttered the one word investors wanted to hear more than anything during his press conference last week—“disinflation”—and they ignored pretty much everything else he said after that. The bullish news from the Fed, at least in the minds of many investors, along with a stronger than expected jobs report, has helped the stock market continue marching higher in the days since.
The S&P 500 is now up nearly 8% year to date, and the tech-heavy Nasdaq has jumped over 14% as investors return to the growth stocks that led markets during the pandemic, hoping a new bull market is forming as A.I. tech evolves and inflation fades. But former Treasury Secretary Larry Summers is worried the “euphoria” is misplaced.
