Good morning contrarians! Stocks are pointing to a dramatic sell-off at the open as investors grapple with the reality of stubborn inflation and higher interest rates…

Bonds are selling off as well, with the yield on the 2-year up 14 basis points to 3.19% and the 10-year up 8bps to 3.23%, moving the yield curve back closer to inversion. Cryptos are taking it on the chin too, with bitcoin down 13% to $24,000.

This week will be all about the Federal Reserve, which starts its two day policy meeting tomorrow. The FOMC will announce interest rate policy on Wednesday afternoon. There is some debate on whether the Fed raises by 0.5% or 0.75%. We’ll deal with this in more detail tomorrow and Wednesday, but the important thing is that the Fed is hiking interest rates, and aggressively.

That simply doesn’t bode well for the economy.

The bottom line: Don’t fight the Fed.

To repeat: Do. Not. Fight. The. Fed. Once the Fed sets on a course for higher interest rates, it is only a matter of time before this cuts into economic growth.

More on this in today’s briefing and podcast: