Stocks are divorced from the economy—but won’t be forever

Slower growth, more inflation and higher interest rates isn’t a recipe for long-term success. Investors had better hope it reverses.

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3 min read . Updated: 26 Aug 2022, 01:10 AM IST James Mackintosh, The Wall Street Journal

What happens in the economy eventually matters. Slower growth, more inflation and higher interest rates isn’t a recipe for long-term success.

Here’s a thought experiment. Imagine the economy is looking a bit end-of-cycle-y, unemployment close to as low as it has ever been, forecast growth low, interest rates being cut and stocks high.