Investors feeling good about the latest stock rally will soon be confronted with the reality of a recession, BlackRock said. But a Fed pause likely wouldn't result in the meaningful rally markets are hoping for, Ned Davis Research previously warned, and hopes that the Fed will pause rate hikes are "optimistic," BlackRock said. We expect the Fed to pause its sharp hikes only after having caused a recession and when confronted with the economic pain. Other market commentators have noted that stock market rallies this year have been fleeting, as companies continue to face headwinds from rate hikes, a soaring US dollar, and persistently high inflation. "We need to see stocks fall more or good news of easing inflation to turn positive on stocks," strategists said.

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