While this year’s sharp selloff in stocks might feel brutal, particularly after the carnage of September, the S&P 500 remains about 17.1% above year-end 2019 levels, according to Dow Jones Market Data.

That isn’t low enough, given the likely scope of Federal Reserve actions needed to bring surging inflation back to the central bank’s 2% annual target, according to Steven Blitz, chief U.S.

“Yes, markets are being routed, but, to date, they are resetting from too rich price levels created by Fed policies that went on way too long,” Blitz said in recent client note.

Investors have been focusing on Friday’s jobs report for September for clues as to whether the Fed might keep up its pace of outsize rate hikes in the face of robust wage gains that have been fueling inflation.

September jobs report

Energy costs as a component of inflation came back into focus Wednesday as crude prices rose after major oil producers agreed to reduce their collective crude production levels by 2 million barrels a day, starting next month

crude prices have tumbled from an peak intraday high in March of almost $130 a barrel, according to FactSet data, after they surged as global economies first emerged from pandemic lockdowns, but also as the move to greener power sources gathered steam and from Russia’s war in Ukraine