The Fed Rate - Update

If you invest in US stocks and crypto, today at 2:30 PM (ET), we will get an official announcement from the official chair of the Federal Reserve - Jerome Powell.

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Jerome Powell

Your profile, US or Indian, will be mainly affected; I know it’s already crazy, and depending on what he says, the market will get more crazy.

With the interest rate hikes, the markets will mostly move up or down!

Tell me, what’s your strategy? Is it buying and holding? What’s your expectations?

Dk about strategy but here’s the expectation

market will prolly overreact in the upcoming days and present gr8 opportunity to buy for long term investors. Raising rates is good! Not opposite - Just don’t overreact, another 10% correction is very likely in the next year things should get back faster than expected IMO

Buy the fear and hold to the moon!

Looking for a huge selloff and will go for shopping😂

Finally, the Fed will act to cool the hottest inflation in 40 years. In March, the rates will liftoff and open doors to more extensive rate hikes than anticipated. The policy will be handy to confront risks to its mandate for price stability and maximum employment.

Stocks slipped during the announcement, and bond yields surged with the dollar advancing. Due to upbeat economic data, the Dow gained more than 300 points in early trading. The Treasury yield had the most significant one-day increase since March 2020.

“There’s a risk that the high inflation we’re seeing will be prolonged; there’s a risk that it will move even higher. We have to be in a position with our monetary policy to address those plausible outcomes,” Powell said, adding that officials were “of a mind” to raise rates in March.

He commented after the Federal Open Market Committee announced that it would halt its asset buy programme in early March and decrease its bond holdings once rate hikes started.

Nomura Holdings Inc. forecasted a 50-basis-point hike in March, followed by a 25-basis-point boost in May, June, and July. Over the year, BNP Paribas SA indicated a quarter-point gain. Throughout 2022, both had predicted four 25-basis-point shifts.

Critics argue that the Fed has been too slow to act and is now behind the curve combating inflation, despite important market indicators contradicting that assertion.

The Federal Reserve’s balance sheet had grown to over $8.9 trillion, more than double its size, when authorities initiated massive asset purchases to soothe market concern at the start of the epidemic.

The Fed added in a separate statement explaining the principles it would use to reduce its balance sheet that, in the long term, it aims to maintain mostly Treasury securities. The Fed also holds mortgage-backed securities, and the move is intended to reduce its impact “on the distribution of credit across sectors of the economy,” according to the Fed.

Powell stated that the Fed would decide on the timing and pace of balance-sheet reductions at future meetings.

Credit: Yahoo Finance