The U.S. economy doesn’t look anywhere close to a recession. Investors are starting to worry that may ultimately be bad news for markets…. In ordinary circumstances, that run of strong economic data should be good news for markets as well. Yet investors have been viewing almost everything the past year through the lens of how it might affect the Fed’s interest-rate policy. Their growing fear is that if the U.S. economy remains too hot, it will force the Fed to raise interest rates higher and hold them there for longer than they anticipate. That would raise the chances of a sharp downturn, which in turn, would likely lead to more pain for markets.
Source: Wall Street Journal
