Morgan Stanley's analysts suggest the Trump administration intentionally enacted initially growth-negative policies, a strategy akin to a new CEO deliberately reporting poor results to lower expectations and clear the way for future positive growth.
The Fed is behind its usual schedule for easing policy due to data delays and COVID-era distortions. This has suppressed the typical market rotation but means the eventual dovish policy will likely be stronger than expected, creating significant upside for early-cycle investments.
A multi-year "rolling recession," which affected different sectors sequentially, concluded in April, quietly kicking off a new bull market. This recovery is not yet obvious because many parts of the economy still lag, which presents a significant investment opportunity.