vand - Good point about AAII survey. Earlier this week the S&P 500 dropped 2.51% one day, and my portfolio lost 2.49%, so I think I've got the right balance of SPY, call options, stock picks and cash.
Despite "transitory" and "lala land" criticisms of the Fed, I'm starting to consider Fed Chair Powell's claims more seriously. In the 1970s/1980s inflation, markets got obscure comments from the Fed, followed by rate hikes. So they reacted to rate hikes... but now the market predicts the Fed, and reacts ahead of time. Maybe lag has decreased because of how markets have changed.
Earlier Chair Powell thought we could have no rise in unemployment during this period of tightening, which is where many investors called him in "la la land". His theory was that vanishing job vacancies would substitute for job losses. While he still points to that, he now allows for a 1% rise in unemployment. I still find that hard to believe, that the lowest unemployment in 50 years could move up from 3.5% to 4.5%, and that's all.
On the downside, the path to a soft landing has narrowed further. I think market consensus is a mild recession, but it's still too early to know accurately.