The key US stock market indices – Dow Jones, NASDAQ, and S&P 500 – finished the fourth trading day of the week with modest gains. In theory, all three indices have increased for several days in a row, but this growth makes no sense given that they all remain near their lows from the past half-year. Thus, it is safe to assume that the downward trend continues and that the US stock market will experience multiple declines. The indices have lost an average of 20 to 30 percent in the last six months. At first glance, this seems insignificant. However, this is a significant amount for the stock market. The most important fact, however, is that there is no longer any reason to anticipate the completion of his fall. Remember that everything still depends on the Federal Reserve and monetary policy. If the foreign exchange market is also impacted by geopolitics and macroeconomics, then the stock market is primarily "the foundation." And the "foundation" is now such that it is nearly certain that indices and stocks will continue to decline. It is not entirely accurate to make such a bold statement, as the last few years have shown us all how rapidly the global situation can change. The most recent information indicates that the "coronavirus," forgotten by all, has not disappeared and will continue to terrorize humanity for many years. Consequently, if the next "wave" begins in a few months, the Fed will likely have to modify its aggressive monetary policy. But if everything continues, the rate will rise, and the allure of risky assets will diminish.The last Fed meeting's minutes were published last night. It contained nothing important, new, or interesting. The document stated that the Fed would consider an additional 0.5% or 0.7% rate hike at its next meeting (in July). Given that the markets are already pricing an 80-90 percent chance of an immediate 0.75 percent increase, we believe this matter is nearly resolved. According to the minutes, tightening monetary policy may temporarily slow the economic growth rate, but the primary objective is price stability.

Most importantly, this "some time" did not last for decades. We have already cast doubt on the predictions of several experts that inflation will return to 2 percent relatively quickly. Now we can question whether the GDP growth slowdown is temporary. Given the current consumer price index level, it is extremely unlikely that a 7 percent reduction will be possible within a few months. It will probably take at least a year if not two or three.