Forecast: The Fed will raise rates by 0.75% today.
Why?
1 - inflation came out higher than expected
2 - long-term inflation expectations in America have risen to 3%+, and this is already dangerous. This means that people begin to think that inflation is with us for a long time, behave accordingly and exacerbate inflation even more. This must be stopped
3 - on Monday, the Wall Street Journal and other media published articles that 0.75% will be seriously considered. Most likely, this is either inside information or a controlled leak in order to prepare investors a little.
Is 0.75% good or bad?
To fight inflation - good, for the economy - bad.
If, as a result, the rate increase will be not by 0.75%, but by 0.5%, then vice versa.
Both that option and the other options have a downside.
Therefore, we think that immediately after the meeting, the markets may well rally on the joys of the fact that the meeting is over. In addition, investors always find a dose of painkiller and sedative in Powell's speeches.
But tomorrow, as has happened more than once the day after the Fed, a downward reversal is quite possible, especially since a giant expiration awaits us on Friday, and this is always pain and hassle, so many will prefer to jump off in advance.
We will be buying aggressively in the S&P around 3500 on futures, but for now we will limit ourselves to fast trades.
1 - inflation came out higher than expected
2 - long-term inflation expectations in America have risen to 3%+, and this is already dangerous. This means that people begin to think that inflation is with us for a long time, behave accordingly and exacerbate inflation even more. This must be stopped
3 - on Monday, the Wall Street Journal and other media published articles that 0.75% will be seriously considered. Most likely, this is either inside information or a controlled leak in order to prepare investors a little.
Is 0.75% good or bad?
To fight inflation - good, for the economy - bad.
If, as a result, the rate increase will be not by 0.75%, but by 0.5%, then vice versa.
Both that option and the other options have a downside.
Therefore, we think that immediately after the meeting, the markets may well rally on the joys of the fact that the meeting is over. In addition, investors always find a dose of painkiller and sedative in Powell's speeches.
But tomorrow, as has happened more than once the day after the Fed, a downward reversal is quite possible, especially since a giant expiration awaits us on Friday, and this is always pain and hassle, so many will prefer to jump off in advance.
We will be buying aggressively in the S&P around 3500 on futures, but for now we will limit ourselves to fast trades.
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, işlem veya diğer türden tavsiye veya tavsiyeler anlamına gelmez ve teşkil etmez. Kullanım Şartları'nda daha fazlasını okuyun.