Jump to content

The stock market slide is unlikely to budge the Fed from tightening


MongiIG

Recommended Posts

image.png

image.png

image.png

The current slide in the stock market may be spooking some investors, but it’s seen as unlikely to scare Federal Reserve officials enough to deviate from their current policy track.

In fact, Wall Street is looking at a Fed that might even talk tougher this week as it is seemingly locked in a fight against generational highs in inflation amid market turmoil.

Goldman Sachs and Bank of America both have said in recent days that they see increasing chances of an even more hawkish central bank, meaning a better chance of even more interest rate hikes and other measures that would reverse the easiest monetary policy in U.S. history.

That sentiment is spreading, and is causing investors to reprice a stock market that had been hitting new historic highs on a consistent basis but has taken a steep turn in the other direction in 2022.

“The S&P is down 10%. That’s not enough for the Fed to go with a weak backbone. They have to show some credibility on inflation here,” said Peter Boockvar, chief investment officer at the Bleakley Advisory Group. “By kowtowing to the market so quickly without doing anything with respect to inflation would be a bad look for them.”


The Fed will have to be easier on the hawkish talk, says Ed Yardeni
Over the past two months the Fed has taken a sharp pivot on inflation, which is running at a nearly 40-year high.

Central bank officials spent most of 2021 calling the rapid price increases “transitory” and pledging to keep short-term borrowing rates anchored near zero until they saw full employment. But with inflation more durable and intense than Fed forecasts, policymakers have indicated they will start hiking interest rates in March and tightening policy elsewhere.

Where the market had been able to count on the Fed to step in with policy easing during previous corrections, a Fed committed to fighting inflation is considered unlikely to step in and stem the bleeding.

“That gets into the circular nature of monetary policy. It gooses asset prices when they are pedal to the metal, and asset prices fall when they back off,” Boockvar said. “The difference this time is they have rates at zero and inflation is at 7%. So they have no choice but to react. Right now, they are not going to roll over for markets just yet.”

The Federal Open Market Committee, which sets interest rates, meets Tuesday and Wednesday. Full article CNBC

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Elliott Wave Analysis TradingLounge Daily Chart Dogecoin/ U.S. dollar(DOGEUSD) DOGEUSD Elliott Wave Technical Analysis Function: Counter trend Mode: Corrective Structure: Zigazg Position: Wave ((C)) Direction Next higher Degrees: wave I of Impulse Wave Cancel invalid Level: Details: the corrective of Wave 4 before entry to uptrend again Dogecoin/ U.S. dollar(DOGEUSD)Trading Strategy: The fourth wave correction is likely to go down to test the 0.1169 level before rising again in the fifth wave. Therefore, the overall outlook is for a short-term pullback to continue rising. Wait for the correction to complete to re-enter the trend. Dogecoin/ U.S. dollar(DOGEUSD)Technical Indicators: The price is above the MA200 indicating a Downtrend, The Wave Oscillator is a Bearish Momentum. Elliott Wave Analysis TradingLounge H4 Chart Dogecoin/ U.S. dollar(DOGEUSD) DOGEUSD Elliott Wave Technical Analysis Function: Follow trend Mode: Motive Structure: Impulse Position: Wave (5) Direction Next higher Degrees: wave ((C)) of Zigzag Wave Cancel invalid Level: Details: We missing one Move down in wave 5 before the price entry to Uptrend again Dogecoin/ U.S. dollar(DOGEUSD)Trading Strategy: A fourth wave correction came before falling again in the fifth wave. Therefore, the overall picture is a continuous decline. Wait for the correction to complete to re-enter the trend. Dogecoin/ U.S. dollar(DOGEUSD)Technical Indicators: The price is above the MA200 indicating a Downtrend, The Wave Oscillator is a Bearish Momentum. Technical Analyst : Kittiampon Somboonsod Source : Tradinglounge.com get trial here!      
    • The Bitcoin Halving has finally occured, a lot of users are filled with optimism with respect to the halving coming to fruition, crypto pundits think the halving precedes a bull run as it often happens historically. A couple of exchanges are well aware of the optimism of crypto enthusiasts, to further boost interest, Platforms like Bitget have come up with worthwhile prizes to enable users earn from the post halving. The first prize pool of the event is about 0.4 BTC, the activities are quite simple, you can trade a futures volume of over 100 USDT to get random rewards of 20 USDT; https://www.bitget.com/futures/usdt/BTCUSDT . Similarly, you can be among the top 50 ranking traders during the event to share from the prize pool. The Futures trading volume must be ≥10,000 USDT to be eligible.
×
×
  • Create New...
us