> The stock market is mostly just an inverse of currency health and tends to be inline or slightly above inflation on average...

This is demonstrably false? Long-term average US inflation since 1913 is 3.1% [0]. Long-term nominal average US stock returns since 1928 are 9.94% [1]. A nearly 7% advantage compounded every year for roughly a century is not "slightly above", it is absolutely enormous. Over 60,000% enormous.

Furthermore, when inflation is high, interest rates go up, and interest rates act like gravity on stock prices. See any number of Warren Buffett shareholder letters. See also: the year 2022. Stock market returns are mildly negatively correlated with inflation (with a coefficient of -0.229 [2]).

[0] https://inflationdata.com/Inflation/Inflation_Rate/Long_Term...

[1] https://awealthofcommonsense.com/2025/01/historical-returns-...

[2] https://www.forbes.com/sites/rmiller/2024/06/20/90-years-of-...

For rate rises that are enacted to slow inflation (which slows stock market growth as you said) i think you have the cause and effect reversed.

The best way to see how inflation and stocks are linked is to look at economies where inflation is not intentionally slowed by rate rises. The stocks go up more or less with inflation (and some small % of gains they may have on top as you say). When you have rate rises that slow inflation you do indeed slow stock growth. But this is also inline with the link between inflation and stock price.