The Fed has failed to slow demand - and that means no upside for stocks as policy tightens, analysts say

• Sticky inflation and robust retail activity are telling signs that the Federal Reserve has failed to stifle demand, analysts said.
• That means investors should expect tighter policy and more weakness in markets.
• "We would not be shocked to see a 15% to 20% pullback from current levels which would take us below the prior cycle."

Sticky inflation and robust retail activity are telling signs that the Federal Reserve has failed to stifle demand, meaning investors should expect tighter policy and more weakness in markets, analysts said.

Though the Federal Reserve has already hiked benchmark rates by 450 basis points since last year to cool the economy and get inflation back under control, January made it apparent that demand remains high.