Historical pattern worth noting: bear markets during Fed hiking cycles only materialized when rising rates simultaneously pressured equity valuations AND corporate balance sheets.
When just one factor was hit, we saw corrections—not full bears.
Right now? Looks like we're in the latter camp. Balance sheets remain relatively healthy despite higher cost of capital. That's the cushion.
Doesn't mean we're bulletproof, but the dual-stress condition that historically triggered 30%+ drawdowns isn't present. Context matters more than rate levels alone.
When just one factor was hit, we saw corrections—not full bears.
Right now? Looks like we're in the latter camp. Balance sheets remain relatively healthy despite higher cost of capital. That's the cushion.
Doesn't mean we're bulletproof, but the dual-stress condition that historically triggered 30%+ drawdowns isn't present. Context matters more than rate levels alone.
