/biz/ - Business & Finance

Is my analysis right or retarded? With current rate hikes they are effectively trying to bring M2 supply back to where it would have been with 2% inflation, i.e around 17k vs 21k where it sits now.
It means the M2 money sypply will drop around 20%. In terms of ratio between stock market value divided by M2, we are currently sitting at around the same level as the covid dip in 2020. If the ratio remains the same it would mean a 20% drop in stocks. Stock could drop even more in a scenario where the ratio goes lowers like in '08.