The Federal Reserve is expected to stop interest rate hikes sooner than expected.
The firm's chief U.S. equity strategist says that it will launch a powerful market break.
Jonathan Golub said on Monday that this is what is being priced into the market. When we go to the gas station, we see that the price of gas is going down. Even though we have food, we see it. It's showing up in the data right now. That could be a really positive thing.
Golub believes that inflation will collapse over the next 12 to 18 months.
Goods inflation has declined from 12.3% to 7.0% since February, and food and energy prices should fall by 5.7% and -11.8% by year end, according to future predictions. Services and Rents have gone up less than HeadlineCPI over the last year.
The Fed is expected to stop hiking rates if there is evidence of an inflation breakdown. Over the next few months.
He said that the market believes that if we continue to go on this glide path, they will either pause or signal that they might pause. The stock market would like to move ahead of that. The stock market is going to increase in value.
It might be a good time to look for opportunities. Golub likes consumer goods and industrials.
The market is currently between fair and inexpensive, meaning there is more upside from p/e multiples.
The S&P 500 is expected to gain 5% from Monday's close. Over the past two months, the index has increased. The S&P is close to its record high.
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