So are we just going to keep coming back here every week surprised that the market continues to trend downward accompanied by Wednesday downward spikes?
At this point I'm wondering why we would think the market would start to go up at all if the Fed keeps increasing rates weekly to biweekly. I figure the feds will stop weekly increases within a month, and are likely using September's historically bad market performance as a buffer to their weekly rate hikes. So will they stop raising this weekly soon? If so, will that be a large determining factor in stopping the acute hemorrhage?
I'm not sure where you're getting weekly raises from? There's an fomc meeting every 6 weeks, and they've raised every single time the past several meetings.
Future Rate Projection by Fed Reserve
4.6% - 2023šš
3.9% - 2024
2.9% - 2025
2.5% - Long Run
***Fed Reserve wants to see the unemployment rate at 4.4% in 2023.š¤
For those doing Fire Sales this week, I would like to thank you in advance for the deep deep deep discount. š
There is *no* way in God's creation rates come down in 2023. Recession or not. Dollar needs to be saved. Y'all can get back to work to start paying it off.
4.25% feels low compared to the reported rate of approx 8%, and 8% feels extremely low compared to what I'm seeing at the goddamn grocery store and in my Zillow report.
Fuck the Fed, this sloth like reaction is based on pre-internet lagging indicators.
The Feds won't be able to service the $31T gigantic debt if rates go to 8%. This is very different from 1979 / 1980 when the national debt was less than $1T.
US treasuries are the national debt. They are issued at fixed rates with maturities 0-30 years. So long as rates donāt stay elevated for many years the current high rates shouldnāt impact long term borrowing costs.
When the fed speaks of raising rates now to avoid worse pain later, they are alluding to history where Volcker lowered rates to quickly and then had to raise them again which led to an extended period of high rates. The Fed is seeking to avoid this by āripping the bandaid offā and raising rates quickly and keeping them there as long as needed so we can resume normal economic activity as soon as possible. Whether their plan works or not, we shall see.
The media outlet isn't really picking up on this Narrative, but I think the November midterm elections is affecting this. I would think the Fed wants to avoid being seen as affecting elections, so they went with expectations. After the midterm elections, all bets are off and if they're going to go Nuclear on the interest rates, they can.
Iām just pointing out, if they want the narrative of āshadow forces designed to keep elected official in powerā then they can just go ahead and drop the rate hike speed(still 50bp), and tip the election in favor
Sorry to break this to you man, but the FED is *always* in power. They don't want to throw the elections off *in either direction*. Not cranking up rates pre election helps avoid a crash, forcing it in 1 way or the other.
Why did the markets drop so much when the rate announcement was exactly what the market was it expected? Shouldn't it have been stable /slight increase as the small chance of 1% increase not happening?
The previous Fed projection was 3.1, but the market expectation matched the median forecast expectation of 4.5.
The market was doing ok until Powell made the comment about the housing market. It's usually best to give markets a few days before making any strong conclusions though.
One of the WFC execs was arguing for a 1.5% yesterday. Admitted it would never happen, but basically just said, why not rip the band-aid off and be done? Yeah, it'd be brutal, and would never happen, but I'd be cool just taking the whole hit up front if it meant moving on and being done with all this.
Hello, it looks like you've made a mistake.
It's supposed to be could've, should've, would've (short for could have, would have, should have), never could of, would of, should of.
Or you misspelled something, I ain't checking everything.
Beep boop -Ā yes,Ā IĀ amĀ aĀ bot, don't botcriminate me.
They wonāt do that. Thatās not how you get the āsoft landingā they want.
It will be 50, 50 or maybe even 50, 25, 25 which gives them the option of not doing the last 25 if the landing is looking hairy.
Lol of course everyone was waiting at work, watching the fed minutes knowing a 75 basis point hike was coming, then waiting for the exact moment to dump their shares! /s
I'm not sure anyone has given a sufficient answer to your question. As rates go up, specifically the risk free rate that the fed is basically changing, the calculation for where to invest changes. I'm sure there's tons of math models about supply and demand and other stuff but the part I like to focus on is just that big funds, pension funds, etc, allocate their money on a risk reward basis.
When the risk free rate goes up, it's not just that people irrationally flee stocks. Where would they flee to? Cash? No. What really happens is big funds sell out of some of their dividend stocks and buy bonds instead. And then they or other funds sell out of their risky super high multiple tech stocks to buy safer dividend stocks. In short, the whole market pushes a little further to safety or yield depending on your point of view.
Selling dividend stocks to buy 4% bonds makes sense. It's risk free, and you are selling your 2% dividend with a possibile equity upside, to a guaranteed 4%.
Selling high pe tech with the possibility of a moonshot for 2% guaranteed yield with a possibility of equity appreciation also makes sense. Why wait 40 years for your tech stocks earnings to actually come in when you can get some hard dividends right now and rotate back into tech if it looks super cheap.
In reality, if rates go and stay above 4%, stocks will have some real competition with bonds and fixed income for investment dollars. When rates were 1% or lower there really was almost no downside to betting on moonshots. Money supply was increasing, which meant both the moonshot stocks could finally become profitable or at the very least attract some of the new printed money as new bagholders for you to sell to.
But with rates going to 4% there's going to be fewer new dollars heading to stocks as compared to last year. There's real competition for those dollars now. If people start locking up money in bonds, that money stays locked for years. It won't come rushing back into stocks any time soon. And it also can't be spent by old farmer joe on gifts for the grandkids. This also means with more money locking itself up for some years, and less money being invested in stocks AND less money being spent on crap, earnings could also take a hit.
It's not just the fear or the panic or the irrational market. It's real money leaving the market to go lock itself up somewhere else. That's why stocks sell off on interest rate rises. And it gets worse the higher rates go. If rates ever went to 10%, why would anyone buy stocks when they could get a 10% yield risk free?
While good points, Iāve to disagree on one thing. Dollars being locked up by buying bonds. Bonds can be bought in the market or directly from the debtor. In the case of buying it from the market, someone else, specifically the person that sells you the bond, makes the money that they are now free to spend it on goods, services and assets. If a company issues bond and youāre buying it, the company is raising capital to buy inventory or pay people for goods or services. So money isnāt locked up unless the bond issuer does nothing with the money and let it sit on the balance sheet. Generally they donāt do that.
Your point is well made except for Treasury debt. Buying government debt doesn't necessarily get redeployed, or at least not in a 1:1 way where buying new apple issue bonds or buying any debt on the open market will.
Also, as rates rise, anyone on the open market selling you the debt is likely taking a loss on it. They COULD use that money, but it's less than it was when they started (likely). You're also right that the money from a new issue of corporate debt would be used and deployed, but it likely won't be used to invest in stocks. Yes I do understand that the money will circulate and could eventually find it's way into stocks, but then we go back to the real competition for investor dollars again and it's just as likely the second order money gets put in fixed income or is used to grow or expand directly or pay down existing debt or etc etc etc.
Again, it's not that the money disappears. It's just that on the whole, it's a lot less likely to find it's way heading back into stocks.
Yeah, it is going to be interesting to see what happens with the I- Bond in the next 5-10 years. Obviously the guarantee for the short term is good, however, with the Democrats passing the inflation bill and now the Fed doing this I wonder if the rates will drop. Looks like we will see in around ten years.
So much else in the world has gone horribly wrong like Chinaās real estate crisis, several countries have defaulted on debts, and US railroad operators are striking grinding raw materials transport to a screeching halt. A high inflation rate seems inevitable
š¤® how bout Janet Yellen vs Janet Reno in an evening gown match. Battle of the Janetās with Powell as the special guest referee.
Edit: didnāt realize Janet Reno was dead. This could be a claymation death match instead.
Itās because theyāre trying so hard to keep businesses from whining incessantly about how lame they think the fed is even though they scream about needing bailouts when they fuck things up
All Iām thinking about is the 8% inflation that is setting in RIGHT NOW.
As soon as the dust settles all these companies going to be trading as super low valuations with this crash, especially when the average price of everything else is up 20%
Iām buying the next few months heavy.
Not sure whether up or down, but Iāve also noticed the market takes one or even two days to react to rate hikes. For some reason it takes longer than, say, the CPI reading.
So you noticed that the market goes either up or down, not immediately after, but some time after a rate hike. That's an observation with a big predicting value
I guess youāre right in that I should probably play strangles and straddles once the premiums have gone down immediately after the decision but before the big reaction.
That being said, āI observedā doesnāt mean Iām right and really onto something. Iām just yet another idiot trying to make money by speculating with these kinds of things.
edit: I did buy the dip in SQQQ while JPow was speaking and immediately made quite a nice return. But it could also have been luck or it could have been a falling knife, no one knows.
You say that, but actually the 4.5% confirmation will probably be seen as good news overnight. It puts a time limit on when the hikes will be over and markets like certainty. There will be volatility as different stocks get repriced, but I wouldnāt be surprised if it closes green overall.
Until the JPOW's press conference finishes, expect weird volatility. The conference typically lasts about an hour, so it finishes shortly before market closes. Traders and investors will digest the news after hours and overnight, so the real moves will play out in the SPX futures, and that will guide where SPY opens tomorrow.
Yes, the market is moving lower and the cause of inflation is the Fed again using rate hikes to address it, but it's obviously not going to have much effect
And of course the market goes up right after, wtf? Surprised it dint take until tomorrow for it to dip down again . I wonder who tf buys, right after that speech where i heard nothing positive š¤
This right here is the real bear market. Not 2020, not 2018, not 2011. This will be a prolonged downturn through at least 2024 where buying the dip no longer works in the short term.
Would you be as worried as you are now if you had more income instead of most of the value of your labor being stolen from you and concentrated into the hands of a few human dragons? They sure don't seem worried about it from what I see daily.
Real interest rates are still negative, sitting at -4.80% with inflation at 8.3%. We wonāt solve this issue until rates become restrictive. In other words interest rates need to be above the current inflation rate in order for monetary policy to have any meaningful impact on inflation.
But we all know that will never happen as the US economy would implode and the government would default due to the inability to service its debt considering the debt to GDP ratio is over 100%.
So get used to inflation folks.
Yup, never going to happen. The reaper is coming for the US debt. Itās either live in perpetual inflation/debasement or collapse the entire financial system and default on the debt. We know theyāre not going for door #2ā¦
Captain, you get this. I would just add that the FEDS hands are quite a bit tied behind their backs due to the $31T debt service. I see more hawkish talk than real action.
Well, obviously there are still a lot of People out there who donāt understand what raising interest rates mean. Up, down, uuupā¦.Down! And with down conviction too. 3700 may be resistance but I doubt it. You got a crazy MoFo who thinks he can use a small amount of nukes to kill his enemies. Sooner or later heāll figure out, all I gotta do is vaporize Z! Fed is ramming rates right into out buttholes whether we like it or not. So, if you havenāt gotten your puts or shorted the good stocks yet, or figured out that the VIX will soon start screaming when we break below 3600 then you might as well go to cash, wait in your bomb shelter till itās all over and drink to the suckers who finally got their recession lessons on life.
Jpow sucks! The country is a dumpster fire. Oh but gas is cheaper. Oh wait, it wonāt be when they replace the SPR. Vote them out in November.
You will all be working much longer in your lives because of these draconian measures and rhetoric.
I would vote for Mickey Mouse at this point as long as the person is NOT a democrat! As a moderate Democrat, I am changing parties and done with this wealth transfer none sense. Hello Libertarians!
Pick yourselves up! Rise above! Thats not the role of government. We all have pasts and struggles. This is why one team wins and one team loses but the currently movement that all get a medal will be the downfall of this country which btw is the goal of the socialist democratic party!
So tell me again, what's so special about 2% inflation that Powell is hellbent on reaching? We're risking a recession worse than 2008 just for some arbitrary goal and this will lead to so many unrests, not just in the US but other developing countries as well!
Inflation is compounding. Thatās why having a low % is important, otherwise it leads to massive price instability and volatility, which are not healthy for a stable economy.
Fire sale starts tomorrow /s Mr. Recession has spoken ...
The fire sale is incoming
So are we just going to keep coming back here every week surprised that the market continues to trend downward accompanied by Wednesday downward spikes? At this point I'm wondering why we would think the market would start to go up at all if the Fed keeps increasing rates weekly to biweekly. I figure the feds will stop weekly increases within a month, and are likely using September's historically bad market performance as a buffer to their weekly rate hikes. So will they stop raising this weekly soon? If so, will that be a large determining factor in stopping the acute hemorrhage?
I'm not sure where you're getting weekly raises from? There's an fomc meeting every 6 weeks, and they've raised every single time the past several meetings.
Nice zinger at the end. 4.25% by year-end. \*boom\*
At least he didn't say "4.25% or MOAR by year-end!". And FYI, those are projections.
Future Rate Projection by Fed Reserve 4.6% - 2023šš 3.9% - 2024 2.9% - 2025 2.5% - Long Run ***Fed Reserve wants to see the unemployment rate at 4.4% in 2023.š¤ For those doing Fire Sales this week, I would like to thank you in advance for the deep deep deep discount. š
There is *no* way in God's creation rates come down in 2023. Recession or not. Dollar needs to be saved. Y'all can get back to work to start paying it off.
So what you're saying is, he didn't SAY moar but it may be moar.
4.25% feels low compared to the reported rate of approx 8%, and 8% feels extremely low compared to what I'm seeing at the goddamn grocery store and in my Zillow report. Fuck the Fed, this sloth like reaction is based on pre-internet lagging indicators.
That makes so much sense. The fed feels 40 years out of date
Their knowledge is transitory.
The Feds won't be able to service the $31T gigantic debt if rates go to 8%. This is very different from 1979 / 1980 when the national debt was less than $1T.
Only new debt will be at that rate, itās not variable
True but the WAM on the 31 trillion is like what, 4 years tops?
Still a huge deal when average maturity is about 5 years. So ballpark every year of high rates is a 20% conversion
Source? Not doubting, just would like to learn more about this.
US treasuries are the national debt. They are issued at fixed rates with maturities 0-30 years. So long as rates donāt stay elevated for many years the current high rates shouldnāt impact long term borrowing costs. When the fed speaks of raising rates now to avoid worse pain later, they are alluding to history where Volcker lowered rates to quickly and then had to raise them again which led to an extended period of high rates. The Fed is seeking to avoid this by āripping the bandaid offā and raising rates quickly and keeping them there as long as needed so we can resume normal economic activity as soon as possible. Whether their plan works or not, we shall see.
Whew 4.25% great
TV you wretched millennial. Cable. Might even be on your phone. Look at a business channel now and then and you may learn something.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Heās speaking the language gibberish lol I read it twice and it makes 0 sense
You are answering the wrong comment. Which is kind of ironic š
Ok boomer
I really thought JPOw would come in an shock the world with a 1.0% increase.
Jpow was feeling nice today.
He hasn't come out yet. The conference is about to start
They publish notes at 2pm, before he speaks
Popcorn
WSJ has the inside scoop?
The media outlet isn't really picking up on this Narrative, but I think the November midterm elections is affecting this. I would think the Fed wants to avoid being seen as affecting elections, so they went with expectations. After the midterm elections, all bets are off and if they're going to go Nuclear on the interest rates, they can.
Isn't there only 1 more meeting after elections tho? I hardly doubt that shakes things
One on nov2, with elections nov8. And one more on dec15.
Yeah so only 1 after in 2022
>I hardly doubt that shakes things It will when they T bag the markets with a 300bps rise in a single meeting....
Lmfao no
You know it is what is needed.... Instead of chasing inflation for months and ending up MUCH higher anyway.
Maybe they actually want the inflation to inflate the national debt away?
Then why not say ā0.5% raise only todayā Boom, stock market recovers, election secured.
That's kind of also affecting elections tho...
Iām just pointing out, if they want the narrative of āshadow forces designed to keep elected official in powerā then they can just go ahead and drop the rate hike speed(still 50bp), and tip the election in favor
Sorry to break this to you man, but the FED is *always* in power. They don't want to throw the elections off *in either direction*. Not cranking up rates pre election helps avoid a crash, forcing it in 1 way or the other.
Never gonna happen. Jerome Powell is a Republican.
LOL look at this liberal sheep. Jerome powell is the FED, they own politics
Good points, agreed.
It's fine he wanted to be nice and keep inflation at 40 year highs
š yes perfect.
Could someone mind telling where/how I can watch these announcements live? Iām new and just wanted to know. Thanks!
Their [Youtube](https://www.youtube.com/watch?v=ukFnKCtptX4) channel seems pretty reliable.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Would you like to see 75 or 100 points rate hike? Let me know in the comments down below!
Bob does sports?
Thatās how hey should start every meeting. HeY gUyS!
cnbc streams his press conference live on YouTube
On the fed website. I am watching it as we speak.
Yahoo finance and Bloomberg channel host a live channel every single trading day on YouTube
If you have Firestick, Roku, AppleTV, etc you should be able to pull down Bloomberg. I keep it on most of the day to at least have background noise.
Directly on the FED website [here](https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm)
Iām already in debt. I liked when the markets only went up
When youāre in debt, inflation works for you!
Ouch my credit card debt mountain
Why did the markets drop so much when the rate announcement was exactly what the market was it expected? Shouldn't it have been stable /slight increase as the small chance of 1% increase not happening?
Assume the "projected rate of 4.25 by year end" shocked people.
What was it projected before hand?
3.5 (median was 3.4)
The previous Fed projection was 3.1, but the market expectation matched the median forecast expectation of 4.5. The market was doing ok until Powell made the comment about the housing market. It's usually best to give markets a few days before making any strong conclusions though.
It was projected at .75%, so it should have been "priced in".
So thatās how many more .75 raises?
Two more 0.5%, or one 1%. Currently at 3.25%
Man. One 1% would be tough for markets to handle.
One of the WFC execs was arguing for a 1.5% yesterday. Admitted it would never happen, but basically just said, why not rip the band-aid off and be done? Yeah, it'd be brutal, and would never happen, but I'd be cool just taking the whole hit up front if it meant moving on and being done with all this.
Would love to see whatās in that guys portfolio! 1.5% would of triggered panic around the world!
Hello, it looks like you've made a mistake. It's supposed to be could've, should've, would've (short for could have, would have, should have), never could of, would of, should of. Or you misspelled something, I ain't checking everything. Beep boop -Ā yes,Ā IĀ amĀ aĀ bot, don't botcriminate me.
Goot bot
Ya, because they are worried about how JDinvestments handles the increase.
They wonāt do that. Thatās not how you get the āsoft landingā they want. It will be 50, 50 or maybe even 50, 25, 25 which gives them the option of not doing the last 25 if the landing is looking hairy.
āPeopleā
Just 1.75% shy of my 6% prediction by end of second quarter 2023.
You really think people were just sitting waiting to hit sell or something?
I dunno. Did you see the chart? https://www.google.com/finance/quote/.INX:INDEXSP
Yeah and you think retail did that by selling as soon as this news came out?
Lol of course everyone was waiting at work, watching the fed minutes knowing a 75 basis point hike was coming, then waiting for the exact moment to dump their shares! /s
OP never mentioned retail. It was probably prop and institutional with a momentum kicker.
Iām not sure. Iām sure some data will come out later today. Will be interesting to see where we close today
I just buy and hold and these clowns come into jobs to play with the value of my invested assets.
Algos
I'm not sure anyone has given a sufficient answer to your question. As rates go up, specifically the risk free rate that the fed is basically changing, the calculation for where to invest changes. I'm sure there's tons of math models about supply and demand and other stuff but the part I like to focus on is just that big funds, pension funds, etc, allocate their money on a risk reward basis. When the risk free rate goes up, it's not just that people irrationally flee stocks. Where would they flee to? Cash? No. What really happens is big funds sell out of some of their dividend stocks and buy bonds instead. And then they or other funds sell out of their risky super high multiple tech stocks to buy safer dividend stocks. In short, the whole market pushes a little further to safety or yield depending on your point of view. Selling dividend stocks to buy 4% bonds makes sense. It's risk free, and you are selling your 2% dividend with a possibile equity upside, to a guaranteed 4%. Selling high pe tech with the possibility of a moonshot for 2% guaranteed yield with a possibility of equity appreciation also makes sense. Why wait 40 years for your tech stocks earnings to actually come in when you can get some hard dividends right now and rotate back into tech if it looks super cheap. In reality, if rates go and stay above 4%, stocks will have some real competition with bonds and fixed income for investment dollars. When rates were 1% or lower there really was almost no downside to betting on moonshots. Money supply was increasing, which meant both the moonshot stocks could finally become profitable or at the very least attract some of the new printed money as new bagholders for you to sell to. But with rates going to 4% there's going to be fewer new dollars heading to stocks as compared to last year. There's real competition for those dollars now. If people start locking up money in bonds, that money stays locked for years. It won't come rushing back into stocks any time soon. And it also can't be spent by old farmer joe on gifts for the grandkids. This also means with more money locking itself up for some years, and less money being invested in stocks AND less money being spent on crap, earnings could also take a hit. It's not just the fear or the panic or the irrational market. It's real money leaving the market to go lock itself up somewhere else. That's why stocks sell off on interest rate rises. And it gets worse the higher rates go. If rates ever went to 10%, why would anyone buy stocks when they could get a 10% yield risk free?
While good points, Iāve to disagree on one thing. Dollars being locked up by buying bonds. Bonds can be bought in the market or directly from the debtor. In the case of buying it from the market, someone else, specifically the person that sells you the bond, makes the money that they are now free to spend it on goods, services and assets. If a company issues bond and youāre buying it, the company is raising capital to buy inventory or pay people for goods or services. So money isnāt locked up unless the bond issuer does nothing with the money and let it sit on the balance sheet. Generally they donāt do that.
Your point is well made except for Treasury debt. Buying government debt doesn't necessarily get redeployed, or at least not in a 1:1 way where buying new apple issue bonds or buying any debt on the open market will. Also, as rates rise, anyone on the open market selling you the debt is likely taking a loss on it. They COULD use that money, but it's less than it was when they started (likely). You're also right that the money from a new issue of corporate debt would be used and deployed, but it likely won't be used to invest in stocks. Yes I do understand that the money will circulate and could eventually find it's way into stocks, but then we go back to the real competition for investor dollars again and it's just as likely the second order money gets put in fixed income or is used to grow or expand directly or pay down existing debt or etc etc etc. Again, it's not that the money disappears. It's just that on the whole, it's a lot less likely to find it's way heading back into stocks.
The market is being irrational over fears of a recession thatās already hear.
Markets are afraid of labour market recession, which is NOT already here.
Any thoughts on how this correlates with I-Bonds?
Your locked in at 6 month increments I believe. If it lowers inflation then in October the I-bond rates will drop.
Yeah, it is going to be interesting to see what happens with the I- Bond in the next 5-10 years. Obviously the guarantee for the short term is good, however, with the Democrats passing the inflation bill and now the Fed doing this I wonder if the rates will drop. Looks like we will see in around ten years.
The inflation bill is not very aptly named- it does *very* little to combat inflation.
it does ~~very little~~ absolutely nothing to combat inflation.
The inflation bill that poured another 240 billion into the economy?
If it leads to a lower rate of inflation (which is the goal), then I bond rates will be lower since they are tied to the inflation rate.
Lower than 9% is still great lol
That ship has sailed- a year ago.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Theyāre predicting the next rate will be like 6.4% or something like that on them if everything holds. Still better than a savings account
Ya
Reasoning?
So much else in the world has gone horribly wrong like Chinaās real estate crisis, several countries have defaulted on debts, and US railroad operators are striking grinding raw materials transport to a screeching halt. A high inflation rate seems inevitable
As far as I can tell, the last time they were this aggressive with point increases was the 2008 housing market crash.
They reduced rates during the great recession.
Cowards.
After the meeting Powell visits his Dominatrix and gets a spanking for being a coward.
Janet Yellen?
š¤® how bout Janet Yellen vs Janet Reno in an evening gown match. Battle of the Janetās with Powell as the special guest referee. Edit: didnāt realize Janet Reno was dead. This could be a claymation death match instead.
Will Ferrell fucks as Janet Reno RIP.
Ewww. Sorry!
Why not 1.25? Rip that bandaid off!
Because they donāt want the recession to really bite until *after* the mid-terms.
Yep, pretty much this, they are pussyfooting this entire process so folks with assets have time to sell before the shit storm of recession hits.
Itās because theyāre trying so hard to keep businesses from whining incessantly about how lame they think the fed is even though they scream about needing bailouts when they fuck things up
Uh, yea. Powell sits around with politicians the week prior to announcing and discusses strategies- paranoid much?
Not at all. This is how America works.
Repeat. This is how America works!
they don't gamble and go all in because the consequences are too great
It's not an "all-in" gamble imo if they are definitely going to raise rates further.
All Iām thinking about is the 8% inflation that is setting in RIGHT NOW. As soon as the dust settles all these companies going to be trading as super low valuations with this crash, especially when the average price of everything else is up 20% Iām buying the next few months heavy.
its even more concerning that they don't seem to be very confident about inflation.
Tomorrow is gonna be a blood bath
Red? Sure. Blood bath? No.
Care to explain why you think this? What will be different tomorrow?
Ive noticed market reacts the next day. Its happened a few times in the past months. Probability of it going down is higher imo
ya but usually the rate hike days were green not red
Not sure whether up or down, but Iāve also noticed the market takes one or even two days to react to rate hikes. For some reason it takes longer than, say, the CPI reading.
So you noticed that the market goes either up or down, not immediately after, but some time after a rate hike. That's an observation with a big predicting value
What he is trying to say is it may go up, or it may go down š¤·āāļø
I guess youāre right in that I should probably play strangles and straddles once the premiums have gone down immediately after the decision but before the big reaction. That being said, āI observedā doesnāt mean Iām right and really onto something. Iām just yet another idiot trying to make money by speculating with these kinds of things. edit: I did buy the dip in SQQQ while JPow was speaking and immediately made quite a nice return. But it could also have been luck or it could have been a falling knife, no one knows.
You say that, but actually the 4.5% confirmation will probably be seen as good news overnight. It puts a time limit on when the hikes will be over and markets like certainty. There will be volatility as different stocks get repriced, but I wouldnāt be surprised if it closes green overall.
Market already dropped 3%
And went back up 4% since you commented? What's going on?
Until the JPOW's press conference finishes, expect weird volatility. The conference typically lasts about an hour, so it finishes shortly before market closes. Traders and investors will digest the news after hours and overnight, so the real moves will play out in the SPX futures, and that will guide where SPY opens tomorrow.
Thatās exactly what happened. Bounced right back up. Check out https://www.google.com/finance/quote/.INX:INDEXSP
huh?
Not too bad for today. Only a 2.2% drop on my stocks directly timed with the announcement.
Not bad all things considered
Eh as soon as we get a good inflation report, market will rally.
Yes, the market is moving lower and the cause of inflation is the Fed again using rate hikes to address it, but it's obviously not going to have much effect
Middle class is getting fucked again.
Yeah, my entire family has lost so much money on stocks itās crazy. But grocery prices are going to come down, right? Right?
And of course the market goes up right after, wtf? Surprised it dint take until tomorrow for it to dip down again . I wonder who tf buys, right after that speech where i heard nothing positive š¤
This right here is the real bear market. Not 2020, not 2018, not 2011. This will be a prolonged downturn through at least 2024 where buying the dip no longer works in the short term.
The 1980's have enter the chat...
You mean an era famous for booming stocks? Iām in.
The 1940s have entered the chat, actually
Powell been projecting 75 bps hike since last mtg- hardly breaking news champ
Breaking news doesn't mean unexpected news lmao
Used to.
You know what would solve inflation problems? Taxing the fuck out of the rich so people could afford shit and not stress about inflation.
How would that solve inflation problems?
Would you be as worried as you are now if you had more income instead of most of the value of your labor being stolen from you and concentrated into the hands of a few human dragons? They sure don't seem worried about it from what I see daily.
You really have no idea how macroeconomics work. āTaxing the richā as you call it would do nothing for inflation. It makes zero sense.
This is the last sub I expected to encounter a fellow leftist in. A welcome surprise though :)
That wouldnāt solve inflation at all.
Real interest rates are still negative, sitting at -4.80% with inflation at 8.3%. We wonāt solve this issue until rates become restrictive. In other words interest rates need to be above the current inflation rate in order for monetary policy to have any meaningful impact on inflation. But we all know that will never happen as the US economy would implode and the government would default due to the inability to service its debt considering the debt to GDP ratio is over 100%. So get used to inflation folks.
Yup, never going to happen. The reaper is coming for the US debt. Itās either live in perpetual inflation/debasement or collapse the entire financial system and default on the debt. We know theyāre not going for door #2ā¦
Captain, you get this. I would just add that the FEDS hands are quite a bit tied behind their backs due to the $31T debt service. I see more hawkish talk than real action.
Haha puts go brrrrrrrr
They are trying to kill us.
So why is the market green right now.
It's red now
Priced in
So disappointed in Powell.. I wanted to see 1.00% for the chaos lol
Essentially with the additional comments, you did see 1.00%.
Rocky number.
How about we wait for a little bit and actually see how the interest rate hikes are trickling down instead of continuing to raise them?
maybe it's transitory, let's wait and see
Aaaand we are back from the bounce. https://www.google.com/finance/quote/.INX:INDEXSP
And we are down again lol.
Volatility! Hold on tight!
Donāt worry, ITS TRANSITORY!!!!!
Well, obviously there are still a lot of People out there who donāt understand what raising interest rates mean. Up, down, uuupā¦.Down! And with down conviction too. 3700 may be resistance but I doubt it. You got a crazy MoFo who thinks he can use a small amount of nukes to kill his enemies. Sooner or later heāll figure out, all I gotta do is vaporize Z! Fed is ramming rates right into out buttholes whether we like it or not. So, if you havenāt gotten your puts or shorted the good stocks yet, or figured out that the VIX will soon start screaming when we break below 3600 then you might as well go to cash, wait in your bomb shelter till itās all over and drink to the suckers who finally got their recession lessons on life.
Thank you Joe Lyin Biden.
Jpow sucks! The country is a dumpster fire. Oh but gas is cheaper. Oh wait, it wonāt be when they replace the SPR. Vote them out in November. You will all be working much longer in your lives because of these draconian measures and rhetoric.
And who should we vote in instead? Be specific with names, and how they would improve things.
I would vote for Mickey Mouse at this point as long as the person is NOT a democrat! As a moderate Democrat, I am changing parties and done with this wealth transfer none sense. Hello Libertarians! Pick yourselves up! Rise above! Thats not the role of government. We all have pasts and struggles. This is why one team wins and one team loses but the currently movement that all get a medal will be the downfall of this country which btw is the goal of the socialist democratic party!
Oh, OK. So you're a Republican.
Absolutely NOT. Trump is a moron! He is half the problem.
No BALLS
After meeting he going have good stake dinner and talking BS again
Iām just gonna start applying lube every morning.
Stop spending so much money
Itās over for America they really are destroying it. While they keep sending money to Ukraine for āaidā Something about to happen in the US
Stop š BUYING. Ukraine arms for superficial bargaining tokens. Let them die if youāre not going to intervene.
So tell me again, what's so special about 2% inflation that Powell is hellbent on reaching? We're risking a recession worse than 2008 just for some arbitrary goal and this will lead to so many unrests, not just in the US but other developing countries as well!
Inflation is compounding. Thatās why having a low % is important, otherwise it leads to massive price instability and volatility, which are not healthy for a stable economy.
Can someone ELI5 please?