Bull markets don't die of old age. The Fed Kills them

Thats not hyperbole. Its market history.

You can see it clearly in the chart below: every major bull market of the last several decades ended only after the Fed hiked rates aggressively.

Not because valuations got too high.
Not because the rally got too old.
Because policy turned even more restrictive.

Thats why todays environment is so tricky.

Yes, signs of froth are flashing. Retail darlings and unprofitable tech are soaring. Risk appetite is back. The correction chatter is growing louder.

But heres the thing: correction the end.

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Because right now, the Fed isnt slamming the brakes. Inflation is cooling. Liquidity is ample. Q2 earnings are strong, even with tariffs. And recession odds for 2025 are drifting lower.

This weeks earnings flood could add more fuel, either to the mania or to the rotation.

And yes, the setup does rhyme with the late 90s. so many similarities that hard to ignore . Including how back then everyone was calling for stagflation and yet economy kept surprising to the upside and inflation continued to moderate.

Back then, markets were frothy too. But the final blow came only when the Fed turned hostile. Until then, pullbacks were sharp but recoveries were even sharper.

So is a correction likely? Absolutely.

But calling the end of the bull without an overly aggressive Fed is a much harder call.

In that kind of world, a barbell/diversified strategy makes the most sense.

Trying to out-time the cycle usually ends badly.

But positioning around what really ends bulls? Thats strategy.

Source of Chart: Macrobond Alpine Macro
(The dramatic framing is my own ???? )

Its not time that kills bull markets. Its the Fed.