No pause, no pivot, says the Fed
@THEMARKET
It should have come as no surprise, but it did. Investors were poised for a slightly less hawkish
There was nothing new in the committee's statement, nor in Powell's remarks afterward in the Q&A session. To some observers, he seemed even more hawkish than usual. Sure, he conceded that at some point, the Fed might pause in their tightening but not yet, and a pause would not mean a pivot toward a more dovish stance anyway.
How many times will the Fed have to reiterate its stance before the markets get it? If there is money to be made in promising hope without reason, traders will continue to suck investors into these bear market rallies. However, there may be other more interesting areas that an investor might want to consider.
For example, those who have been hiding in cash, or those who may be losing their shirts invested in equities, may want to consider purchasing some
Granted, that is only giving you about half the present inflation rate, but even the Fed is expecting the inflation rate will come down over the next 12 months. In the meantime, you are at least earning something, instead of losing more money in the stock market.
Another suggestion might be to consider Series I Bonds, which are
Now that doesn't mean you should go out and sell everything and pile the money into
So, is this latest rally over? Not necessarily, but if the markets are going to continue to move up, at least for another week or two, it will have to be on something other than Fed policy. About the only bullish event in the
As of today,
Rumors that
Could that outcome trigger a rally in the markets for a couple of weeks? Probably, and we might be able to put together a bullish scenario that could see my target of 4,000-4,100 met on the S&P 500 Index achieved.
I warned investors that this relief rally would be different and so far, it has been - lots of ups and downs. In the meantime, equities are still at the mercy of interest rates, the strong
inflation.
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