All things, from credit-card payments to mortgage rates The Fed’s Wednesday third 75-basis point hike confirmed that prices are now higher. The new 0.25 is 0.75It was once the standard increment.
Phil Rosen here, from New York. Yesterday afternoon markets shook as the FOMC made its announcement and Jerome Powell offered comments during the press conference.
The Fed chair was not shy about his views, even going so far as to say that there is no painless way of taming inflation.
I called on some Wall Street pros to better grasp yesterday’s events — and below I’m breaking down why JPMorgan said the Fed could actually cut rates if it means saving the stock market.
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1. The Fed raised interest rates 2022 at the same pace as it did in 2022The policymakers could make the following suggestions exact oppositeMarko Kolanovic was JPMorgan’s quant genius in 2023.
Yesterday’s federal funds rate ranged from 3.0% to 3.25%. Third consecutive 75-basis point rate increase and the fifth increase of the year.
It was close to zero at the beginning of 2022.
Jan Szilagyi CEO of investment research company Toggle told me that he expected the Fed to raise rates to 4.5% and 5% in early 2023. Then, he would pause. He said that historically, the time interval between the first hike and the next hike is less than one year.
However, should the unemployment rate increase?When company earnings are low enough to cause a deep recession, A market-friendly central bank might emergeKolanovic predicts that the trend will continue for the next year.
This means that the Fed could be next year Slash rates and reverse the course, which he said would backstop equity markets — and ultimately limit downside for stocks.
However, Wednesday’s takeaway will be available.There are fears that rate hikes will increase further. Policy adjustmentsThe economy will plunge into recession.
After the Fed’s decision was published, Charlie Ripley, strategist at Allianz Investment Management, said that “the Fed will adopt an aggressive stance in policy until they can find meaningful evidence that inflation has moved toward their stated goal 2%.”
Cliff Hodge is Cornerstone Wealth’s chief investment officer. He warned of higher unemployment and a correction in the housing market.
According to him, a Fed pivot is unlikely until the unemployment rate reaches 5%.
Hodge stated that Powell would be willing to channel his inner Volker and that they will find out.
How will the Fed’s third major rate hike have an impact on your outlook for the economy, and your portfolio? Email prosen@insider.comTweet @philrosenn.
In other news
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2. The direction of the US stock futures was unclear early Thursday The odds of an economic recovery were fading after Wednesday’s Fed rate hike. Meanwhile, Japan intervened in the currency markets for only the second time since 1998To support the yen. These are the most recent market movements.
3. Earnings on deck: Costco Wholesale Corp., Accenture plc, FedEx Corp., all Reporting. Also, keep an eye out for the weekly unemployment insurance claims report from the US Department of Labor, which is expected to be released later today.
4. BlackRock’s $2.1 billion iShares Americas unit’s head of investment strategy said that the Fed would not lower interest rates for at least 2024. Gargi Chaudhuri explained how to invest in an uncertain market — It was revealed which stocks sectors are most likely to be able to generate cash flow and weather a recession.
5. China is reducing its oil stocks in an indication that Beijing wants to boost its economy through increased fuel exports. Vortexa data has shown that Chinese inventories have been reduced by roughly 1 million barrels per hour over the past three week. China’s traders and oil refiners applied for 15 million more tons of export quotas.
6. The first six-weeks have seen an increase in mortgage applications. According to The Mortgage Bankers Association (MBA), applications increased by 3.8%, after dropping 29% in week prior. This reflects housing market volatility. Here are the facts.
7. Michael Burry, an investor of “Big Short”, said that he’s not shorting Tesla at the moment. But he added the EV maker is hugely overvalued, and compared the buzz around Elon Musk’s company to hype during the dot-com bubble —And that he should be betting against his company.
8. After building his real estate portfolio, this 39-year-old now owns 21 rentals. After 18 years of building his property assets, he now wants to play the long game. These strategies can be used to take a conservative approach when investing.
9. Goldman Sachs advised investing in these stocks, which are high-profitable. As the Federal Reserve raises rates, stock valuations and earnings are under increasing pressure. Here’s the Wall Street Bank’s 50-name list that can still bring in returns.
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10. Fairlead’s Katie Stockton indicated that the crypto bear markets will continue if bitcoin continues to fall below $20,000 According to the technical analysis-based research company, secondary support for Bitcoin is at $13,900 and short-term momentum has shifted negatively. Look at the numbers.
You can keep up to date with all the market news throughout the day by visiting www.markets.com Insider: The RefreshA dynamic audio news brief from Insider. Listen here.
Phil Rosen in New York curated this collection. (Feedback and tips? Email prosen@insider.comTweet @philrosenn).
Jason Ma (jma@insider.com), edited. in New York and Hallam Bullock (@hallam_bullock) in London.
