While a soft economic landing is the most likely outcome, it’s hard to ignore the possibility a lower rate of price growth could be setting the sharemarket up for a strong rally.
Alan Greenspan famously coined the phrase “irrational exuberance” when discussing the sharemarket in December 1996 – the midpoint of his storied tenure as US Federal Reserve chairman.
The S&P 500 would go on to double before peaking in 2000 when unprofitable internet companies finally came crashing back down to earth. But was Greenspan premature in calling the market irrational?
