Hartnett: "The Fed Hiked Until It Broke The Regional Banks"

Long before he was known as the most accurate analyst in the post-covid era, BofA strategist Michael Hartnett formulated a maxim that has proven true to this day: it was five years ago, back in May 2018, and not too long before the Fed aborted its first attempt at tightening, that Hartnett correctly coined the phrase that "every Fed tightening cycle ends in crisis."

Just six months later Harnett was vindicated for the first time when just as the Fed hiked to 2.50%, markets tanked, the S&P briefly slumped into the first bear market since the Lehman crash, and Powell was forced to pivot (back then inflation was much lower so the threshold of doing so was also lower). And so, the Fed quickly started easing - again - before sending rates right back to zero after the world was shut down by Fauci in the aftermath of the covid pandemic, sparking the biggest easing cycle-cum-helicopter money injection in history.

But that's not the only time Hartnett's maxim would be spot on: as a reminder, back on February 18 (when the S&P traded around 4,100) the BofA strategist warned that the "Fed Will Tighten Untill Something Breaks... And Stocks Will Swoon To 3,800 By March 8."