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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-
by 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 agoHow 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 agoWhat 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.