ππ«π²π©ππ¨ πππππ‘ππ« π π¨π«ππππ¬π Now wasnΒ΄t that unexpected? When the FED does a 75 points rate hike markets rally, but with a 50 points hike they dump! Well itΒ΄s all about the tone of voice, or the tone of FED, and the fact the market is always forward-looking. Hence last time with the 75 points the tone sounded as if a 50-point hike was possible, hence a happy market. Now we got that 50 point hike and people expected a slow reduction in the hikes, but JP made very clear heΒ΄s not giving up the fight against inflation. They will keep fighting till itΒ΄s 2%. Based on the CPI and the current stabilization of prices a 2-3% CPI would come in June 2023. But the FED is taking a different approach and expects the Year over Year inflation to stay above 2-3% for at least another year. They say donΒ΄t fight the FED, but I think in this case they might be wrong and we will see a stable 2-3% inflation by summer of 2023.
2 comments
Case of "buy the rumor, sell the news"?
Yes but although in reverse if you ask me the rumor is to sell, nad people will buy once they figured out that it might only last till June 2023. Still no big expectations in my forecast for 2023, already happy when things stabilize by mid 2023