According to Leuthold Group strategist Jim Paulsen, the US stock market could expect a positive surprise in the form of “surprisingly strong” results amid easing uncertainty about the Fed’s next steps, writes Business Insider.

According to Jim Paulsen, uncertainty about the Fed’s policy and market sentiment will improve next year, which could give a boost to stocks.

As for the first factor, uncertainty about the Fed’s rate, Jim Paulsen believes that next year it will bring a pleasant surprise and could give impetus to a rally in the market. That figure has held up 82% of the time since 1987, when the asset bubble burst and Wall Street crashed on Black Monday. But since inflationary pressures are already showing signs of easing, this factor should not exert negative pressure, since, in all likelihood, the Fed will ease the pace of rate hikes.

And while inflation is overstated in official statistics, and leading inflation indicators such as house prices are falling rapidly, this will not be reflected in the consumer price index for another 18 months.

Paulsen also pointed to an index of positive market sentiment, which is now close to its 1990 record low, which could also push the US central bank to soften its hawkish tone and spark more optimism.

Although at the same time, the expert noted that optimism could still be undermined by new macroeconomic headwinds, in particular recession fears on Wall Street and concerns about lower incomes.