I’m not a GameStop (NYSE:GME) hater. In fact, I have never traded the stock, nor do I have any intention to. But when I see the market’s reaction to “the return of Roaring Kitty,” I can’t help but think that the Federal Reserve isn’t done raising rates. That liquidity is still too ample. This is not an efficient market. This is not some game. I said before we are going back in time to 2021, and the last time we saw this type of silliness, it was the top for most stocks.
I have repeatedly argued that the Fed can’t lower rates with credit spreads this tight. We went through the fastest rate hike cycle in history, and the bond market has said there’s still too much money sloshing around in the system. Low credit spreads mean the market is not worried about stress to the system. No stress? More speculation.
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