I wonder if this isn't just a matter of inflation being under reported because it's an easy metric to game while revenue and profits from companies are not.
In the US the official inflation figure between 2019 and 2025 was 28%, but I feel like most people "on the ground" are seeing a much higher inflation rate in housing, food and transportation.
So the stock market is effectively a somewhat doped inflation indicator because SP500 outperforms in general.
gruez · 16m ago
>In the US the official inflation figure between 2019 and 2025 was 28%, but I feel like most people "on the ground" are seeing a much higher inflation rate in housing, food and transportation.
People's vibes are notoriously inaccurate. The most famous one is perceptions of crime, which (prior to covid) been dropping for decades, but you wouldn't get that impression from asking the average joe on the street. Same if you asked people basic economic figures like whether the stock market is up or down.
lazide · 1h ago
IMO, this is exactly what is happening. Near as I can tell, S&P500 is actually almost neutral if we count inflation.
Also, we’re very likely to get a replay of the late 70’s (leading to the early 80’s) soon if Trump gets what he wants with the Fed.
He wants to inflate out of this mess, and I suspect he’ll get what he wants.
spott · 44m ago
Personal theory: the rise of ETFs as a fallback means that money isn’t leaving the stock market anymore. Instead of people selling off and going to cash, they go to SPY, which doesn’t have the downward pressure on the stock market that going to cash does.
codingrightnow · 2h ago
All of our retirement accounts are investing in the stock market. That is why it's untouchable. Where else would our retirement accounts put their money?
hyperhello · 2h ago
While people are retired, they take money from contributors. There’s nothing else going on except whole sections of the newspaper devoted to gossip about minute stock changes. The DJIA and S&P and other baskets follow 401k contributions like a random walk.
Projectiboga · 2h ago
Crypto may be opening up new avenues for leveraging. So this may be like the pre 1929 & 1930s stock crashes which were partly fueled by excessive leverage and the impact of tariffs for the second crash.
>the worst inflation in 40 years, and the highest interest rates in 20 years.
Caused by who again?
>The uncomfortable fact about the historic stock-market run is that no one really knows why it’s happening—or what could bring it to an end.
Why is that uncomfortable? A rising market is a good thing.
It’s uncomfortable because it challenges your assumptions. You expected the opposite to happen, and now you're experiencing cognitive dissonance. Meanwhile, those you may disagree with politically seem to understand the market better than you do.
This is a chance to reflect on your expectations, identify where your understanding was flawed, and learn from it.
UltraSane · 2h ago
What are you talking about?
igor47 · 2h ago
I parsed it! They are saying, "you HN liberal types thought the market would go down, but it's going up. You might consider that your failed prediction demonstrates a fundamental misunderstanding of the world".
They got HN demographics wrong, plus while causality is hard, I do think "the inflation and high interest rates were caused by liberals" is a difficult claim to justify. Besides that, I do think it's an interesting take. Every failed prediction is an opportunity for reflection
UltraSane · 1h ago
I love the unshakable faith Republicans have that Republicans are better for the economy when there is so much evidence to the contrary. I suppose if you define "economy" narrowly enough it might be true.
In the US the official inflation figure between 2019 and 2025 was 28%, but I feel like most people "on the ground" are seeing a much higher inflation rate in housing, food and transportation.
So the stock market is effectively a somewhat doped inflation indicator because SP500 outperforms in general.
People's vibes are notoriously inaccurate. The most famous one is perceptions of crime, which (prior to covid) been dropping for decades, but you wouldn't get that impression from asking the average joe on the street. Same if you asked people basic economic figures like whether the stock market is up or down.
Also, we’re very likely to get a replay of the late 70’s (leading to the early 80’s) soon if Trump gets what he wants with the Fed.
He wants to inflate out of this mess, and I suspect he’ll get what he wants.
Caused by who again?
>The uncomfortable fact about the historic stock-market run is that no one really knows why it’s happening—or what could bring it to an end.
Why is that uncomfortable? A rising market is a good thing.
It’s uncomfortable because it challenges your assumptions. You expected the opposite to happen, and now you're experiencing cognitive dissonance. Meanwhile, those you may disagree with politically seem to understand the market better than you do.
This is a chance to reflect on your expectations, identify where your understanding was flawed, and learn from it.
They got HN demographics wrong, plus while causality is hard, I do think "the inflation and high interest rates were caused by liberals" is a difficult claim to justify. Besides that, I do think it's an interesting take. Every failed prediction is an opportunity for reflection