, leading commentators to warn of tighter credit conditions that slow the economy and weigh on stocks.
The Fed's aggressive pace of tightening has also resulted in the largest yield-curve inversion out of any developed country, RBA noted. Meanwhile, the US market has a higher exposure to rate-sensitiveThose factors suggests investors need to branch off into non-US stocks, Poterba said, pointing out that consumer discretionary stocks lost 38% in the US in 2022, but fell 21% in Europe.
"International markets trade at a huge discount to the US," Poterba said, estimating that US stocks could cost nearly twice as much as non-US stocks, for less growth."US markets still appear stubbornly ignorant of risks within the US," he added. Other market commentators have warned of risks to US stocks as investors continue to ride a wave of volatility.