Stock Market Faces Potential Decline Amid High Interest Rates And Inflation

According to BlockBeats, on November 4, Wall Street veteran Bill Blain expressed concerns that while lower borrowing costs might offer temporary relief to households and companies, they should not become complacent. Blain warned that interest rates and inflation are expected to remain high, which could lead to a significant stock market downturn next year. Blain, a long-term strategist and head of Wind Shift Capital Advisors, predicted that the stock market would experience turbulence over the next 12 months. He argued that the Federal Reserve is unlikely to lower interest rates as much as the market anticipates. Instead, borrowing costs might increase from now on, potentially curbing loans, slowing investments, and causing a 7%-12% decline in U.S. and global stock markets. Blain stated, "I believe the crisis we face is that when interest rates start to rise, governments will be unable to stimulate the economy in a high-interest-rate environment because they have already lost market support." His forecast may seem counterintuitive to investors who have been pricing in significant rate cuts by the Federal Reserve. However, Blain emphasized that the U.S. economy faces too much inflationary pressure in the medium term to justify aggressive easing policies.