America’s stockmarket is on a tear. Over the past three months the S&p 500 index of large companies has soared by nearly 15%, reaching a record high (see chart 1). Recent economic data support investors’ optimism. On February 2nd the Labour Department reported that 353,000 jobs were created in January, far more than expected. The economy grew by a healthy 3.3% (at an annual rate) in the final quarter of 2023. Despite that, inflation slowed to 2.6% on the Federal Reserve’s preferred measure, not far off its 2% target. Investors are now betting that by the end of the year the Fed will lower its
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