1 Month in, was Seema Shah right about the direction we are headed?

I tend to look to investopedia for knowledge regarding the stock market but their newsletter is pretty slow.

However, I found a gem in the form of an interview published a month ago with Seema Shah, Principal Global Investors' chief global strategist.

Interview here: https://www.investopedia.com/the-express-podcast-episode-90-5409520

Here are some notable quotes regarding Seema's opinion on inflation and interest rate hikes:

“It's a really important thing that we're talking about at the moment, because what I'm finding is investors are taking a lot of comfort from the current strength of the economy, but they're ignoring the monetary policy. It typically works with a six-to-24-month lag. So, whatever happened today with the Fed is not going to be showing up in the economy for several months, several quarters, still.”

“But we also look at consumer spending. That is particularly strong and that has been held up by the cushion of excess savings provided during the COVID crisis. We look at the labor market, unemployment rate close to the pre-COVID lows, and extremely tight, really, really strong labor demand. But you fast forward 12 months from now, and consumers are going to be struggling because time and inflation is going to eat away at a lot of that excess savings, especially for your lower-wealth thresholds of the economy. You look at the labor market, and so many companies are struggling with the margin pressures from higher costs. And you can start to see that temporary help, which is usually your main leading indicator for the labor market, is starting to decline. So, 12 months from now into 2023, things are going to look very different from a number of economic indicators.”

“So, the thing that seems to come up in every single conversation that we have with them, which it is absolutely right to be questioning this, is in this inflationary environment when you know that the Federal Reserve and other central banks around the world are going to be hiking really aggressively, how on Earth can markets continue to outperform? Is this the time to go in cash, or is there any opportunity within the market? And look, it's really important… this is not the time to cash out. This is the time to become more clever with your investing. So, more selectivity and more understanding of where you are allocating. Because we can't hide away from this. Things are going to get tougher.”

So what do you think? Does she have the right idea or do you still think the market can turn it around?