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Opinion
John Authers

Crash Test This Week for Market Versus Real World

An increasingly bullish outlook is on a collision course with Fed policy goals that still demand tighter financial conditions. The complications risk leading to longer hawkishness. 

How much of an immovable object are the Fed’s policy goals? An increasingly bullish market will find out.

How much of an immovable object are the Fed’s policy goals? An increasingly bullish market will find out.

Photographer: Andrew Harrer/Bloomberg
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As in many other things in life, markets can pick up momentum and become unstoppable. That seems to be happening now. Risk assets are on an unmistakable tear. There’s a saying that the market is never wrong, which is not true in any useful sense. Yes, the market dictates the price you will have to pay or receive in the here and now, but there are plenty of ways the market’s judgment can be proved wrong. But even if we give up on that aphorism, it’s true that it’s never safe to ignore what a market is saying. The market, after all, can to an extent create its own reality.