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> Fed's increasing of the interest rate is causing a stock market crash. Citation needed. Rate hikes were announced mid-march and I don't think you can even f

> Fed's increasing of the interest rate is causing a stock market crash. Citation needed. Rate hikes were announced mid-march and I don't think you can even find that info on this chart https://finance.yahoo.com/quote/%5EDJI/ https://finance.yahoo.com/quote/%5EDJI/ If we do see a crash soon I think it will likely be more related to major tech stocks failing to perform as expected. Of the original FAANG, F and N have both had days where there value dropped ~30% in a single day in the last six months, and that has nothing to do with interest rate hikes.

jimbob45 5y ago
Even if that were true, you necessarily have to hike the interest rate intermittently to ensure you have room to lower it when the crash inevitably happens.
darth_avocado 5y ago
Well fed increased rates in March but they announced it long ago and the market corrected accordingly. It is common knowledge by now. The market is expecting 7-8 25 point increases in 2022 which has been priced in the declines so far. Any deviation to that will move the markets further.
- cudgy 5y ago
  How do you know this? My inclination is to think investors are underestimating the effects of inflation and overestimating the Feds ability to counter it without major rate hikes (like above 7-8% or higher). The Fed has created a major problem by keeping rates so low for so long. Who is going to buy the bonds they are going to have to sell in order to back off quantitative easing. Plus now there is the threat to the US dollar remaining the preferred currency with the Biden administration seizing almost a trillion dollars worth of Russian dollar denominated assets. Other countries are likely taking notice of this.
- 01100011 5y ago
  What the bond market has priced in and what equities have priced in are two completely different scenarios. If the bond market is right, equities are about to get slaughtered. Remember, the fed folks can't insider trade like they used to, so they have no reason to prop up equities anymore. They made their money.
cwalv 5y ago
The valuation of growth stocks (of any sort, not just tech stocks) is very heavily influenced by interest rates
sanctified384 5y ago
Just because the formal rate increase happened in March doesn't mean people didn't know about it already. Rate hikes are typically speculated on for several weeks (months?) before they actually happen. By the time it actually happens, the market has always priced it in. The decrease in Jan/Feb was in anticipation of the March increase. And the current swings are in anticipation of the May/June increases.
sb057 5y ago
The CME's FedWatch tool shows investors started pricing in rate hikes around November, with a sharp uptick in acceleration starting around February. https://files.catbox.moe/cs4gtg.png https://files.catbox.moe/cs4gtg.png https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html https://www.cmegroup.com/trading/interest-rates/countdown-to...

jimbob45 5y ago

Even if that were true, you necessarily have to hike the interest rate intermittently to ensure you have room to lower it when the crash inevitably happens.

darth_avocado 5y ago

Well fed increased rates in March but they announced it long ago and the market corrected accordingly. It is common knowledge by now. The market is expecting 7-8 25 point increases in 2022 which has been priced in the declines so far. Any deviation to that will move the markets further.

cudgy 5y ago
How do you know this? My inclination is to think investors are underestimating the effects of inflation and overestimating the Feds ability to counter it without major rate hikes (like above 7-8% or higher). The Fed has created a major problem by keeping rates so low for so long. Who is going to buy the bonds they are going to have to sell in order to back off quantitative easing. Plus now there is the threat to the US dollar remaining the preferred currency with the Biden administration seizing almost a trillion dollars worth of Russian dollar denominated assets. Other countries are likely taking notice of this.
01100011 5y ago
What the bond market has priced in and what equities have priced in are two completely different scenarios. If the bond market is right, equities are about to get slaughtered. Remember, the fed folks can't insider trade like they used to, so they have no reason to prop up equities anymore. They made their money.

cwalv 5y ago

The valuation of growth stocks (of any sort, not just tech stocks) is very heavily influenced by interest rates

sanctified384 5y ago

Just because the formal rate increase happened in March doesn't mean people didn't know about it already. Rate hikes are typically speculated on for several weeks (months?) before they actually happen. By the time it actually happens, the market has always priced it in. The decrease in Jan/Feb was in anticipation of the March increase. And the current swings are in anticipation of the May/June increases.

sb057 5y ago

The CME's FedWatch tool shows investors started pricing in rate hikes around November, with a sharp uptick in acceleration starting around February. https://files.catbox.moe/cs4gtg.png https://files.catbox.moe/cs4gtg.png https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html https://www.cmegroup.com/trading/interest-rates/countdown-to...