Why Today's Market Feels Different

With recent market volatility and headlines swirling, it’s natural to wonder: Is this time different?

The short answer is yes and no. What’s different now is that we are facing a convergence of several historical policy challenges at once — many of which have independently caused major market downturns in the past.

Let’s take a closer look:

1. The Great Depression (1930s)
   Policy Mistake: The Federal Reserve raised interest rates during a deflationary crisis, and the U.S. enacted protectionist tariffs that hurt global trade.
   Result: Stock market fell nearly 90%; unemployment reached 25%. Recovery took over a decade.

2. 1970s Stagflation
   Policy Mistake: The Fed delayed raising interest rates despite high inflation.
   Result: Inflation exceeded 13%, unemployment rose, and stock markets delivered flat or negative real returns for nearly a decade.

3. 1980–1982 Volcker Recession
   Policy Mistake (Necessary but painful): The Fed aggressively raised interest rates to nearly 20% to fight inflation.
   Result: Severe short-term recession and unemployment near 11%, followed by strong economic growth and a long bull market.

4. Dot-Com Bubble Burst (2000–2002)
   Policy Mistake: Easy money and lack of regulation helped fuel unsustainable tech stock valuations.
   Result: NASDAQ fell nearly 78%, leading to a mild recession and years of stagnant equity performance.

5. Global Financial Crisis (2008)
   Policy Mistake: Excessive leverage, housing market speculation, and delayed regulatory response.
   Result: The S&P 500 fell ~57%; deepest recession since the 1930s; widespread financial panic.

6. The Trump Tariff Crisis? (2025–?)
   Potential Policy Mistake: Global tariffs met unstainable stock valuations fueled by massive government deficits, low interest rates, easy money Federal Reserve policies which resulted in higher rates and inflation.
   Result: ?

Today’s Landscape: A Combination of Historical Mistakes

1. Low Interest Rates for Nearly Two Decades
   Like the pre-2008 and dot-com eras, easy money fueled risk-taking, speculation, and inflated valuations.
2. Massive Federal Deficits and Debt ($37 Trillion)
   Echoes of the 1970s and 2008, when unchecked fiscal expansion created systemic pressure and inflationary risks.
3. Sticky Inflation and a Fed That’s Cornered
   Reminiscent of the 1970s and early 80s — inflation that doesn’t fall easily, and a Federal Reserve forced to choose between price stability and growth.
4. Extreme Valuations
   By many historical metrics, stock valuations were among the highest ever heading into 2024 — like the 2000 dot-com peak.
5. Slowing Growth, Rising Geopolitical Tensions
   As in past cycles, slower economic momentum combined with global uncertainty adds further strain on sentiment and corporate profits.

So, What Does This Mean?

It means that policy missteps now could have outsized consequences — not because of a single bad choice, but because the margin for error is so small. This is a complex environment where patience, discipline, and flexibility are more important than ever.

But here’s what hasn’t changed:

• Markets still function over time. Fear has never outperformed a thoughtful plan.
• Asset prices reset. And while painful, that often creates long-term opportunities.