Every Time Inflation Has Crossed 4% the Market Has Crashed.

Why It Matters

If May CPI exceeds 4%, history suggests a tightening-driven hit to growth and equities, constraining Warsh’s policy options and raising the risk of a market downturn that could unfold within the next year.

Summary

Incoming Fed chair Kevin Warsh faces a historically perilous backdrop as U.S. consumer inflation nears the 4% threshold that has preceded every major market crash since 1970. Inflation has risen from 2.4% in late February to 3.8% in April, with many banks forecasting May will top 4%, and professional forecasters recently revised near-term inflation dramatically higher. The video argues that past episodes of inflation above 4% led the Fed to keep policy tight, borrowing costs rose, corporate earnings weakened and equity markets tumbled within 6–12 months. Markets currently price no rate cuts through 2026 while stocks sit near record highs, setting up a potential reckoning if May CPI prints above 4% on June 11.

Original Description

Every time inflation has crossed 4% the market has crashed. Watch CPI on June 11th.

#inflation #stockmarket #marketcrashes