Consumer Sentiment Boom And Bust 3.0

"A so-called soft landing — where inflation returns the Fed's 2% target without a sharp economic downturn — has become close to a consensus call to begin 2024 as economist have become increasingly confident in inflation's path downward. This marks a stark reversal from the economic vibe at the start of 2023, when a recession was the consensus expectation"

FR: Looking at the chart below we see that consumer sentiment is a good predictor of market tops. Also, the two year boom/bust pattern that I showed previously with the Global Dow is also evident with consumer sentiment.

It speaks to the inherent nature of social mood that as people become more optimistic they take more risk in markets. As they take more risk in markets, they become more optimistic on the economy. Until such time as sentiment reaches a manic high along with speculation. Then when markets rollover and crash, sentiment implodes.

It's amazing how our species is constantly and reliably never self-aware.

It's even more amazing that pundits always extrapolate fake optimism into the future.