TheStreet’s Post

As investors gear up for the conclusion of the Federal Reserve’s two-day policy meeting later today, markets are on tenterhooks anticipating the central bank’s decision on interest rates. Most analysts expect the Fed will raise rates by another 75 basis points, the fourth consecutive hike of such magnitude, in its fight against stubbornly high inflation. Fed Chair Jerome Powell’s press conference after the meeting will provide crucial insights into the outlook for further tightening. . To read more info check out this link: https://buff.ly/3IHW6aO . Follow us for more information: Business Outreach . . #businessoutreachmagazine #BusinessOutreach #Fed #reserve #centralbank #hike #highinflation #investor #financialconditions

Rates are headed lower for longer. The intent of entering into QE by any central bank is not to eventually secure an escape point. It’s the last gadget in their tool box [albeit better than their other remaining options before it such as a prolonged cyclical recession]. However, just like Hotel California you can check out any time you like, but you can never leave. Nevertheless, QE was the inevitable price to pay for a global village and the evacuation of the US manufacturing sector to non-unionized 3rd world nations. The US left to maintain and grow GDP primarily though spending supported by debt. Debt fueled by low interest rate policy out of the Fed. Not to talk down global integration it has many distinct advantages. Today, with the US being primarily built on debt/spending and not productivity, that should be the lens looking into the future [lower for longer]. The US is not revisiting the economic policies circa 1971 through to 2008.

Hmmm. 🤔 Fed funds futures markets are pricing rates to bottom out at 4% and then rise again. Torsten Slok chief economist Apollo Global Management, Inc. “Fed funds futures show that the market is currently pricing that the Fed funds rate over the next five years will bottom at 4% and then slowly start to rise again, see chart below.” “In other words, the market is pricing that monetary policy will remain restrictive and above r-star (2.5%) for the next five years.” “Put differently, the market is currently pricing a “no landing” scenario where monetary policy will have to put downward pressure on GDP growth and inflation for the next five years. In short, the market is extremely bullish on the economic outlook over the next five years.” “A different way to look at current Fed pricing is to compare Fed funds futures to the longer-run dot in the Fed’s dot plot, which shows that the FOMC expects the Fed funds rate in the longer run to be 2.5%.” “The bottom line is that the FOMC and Fed estimates of r-star are saying that the Fed funds rate will move down to 2.5%. But the market disagrees and says that rates will stay around 4% for the next five years, see again the chart below.” 🍀 “The credit impulse ahead of 2024 looks recessionary.” Andreas Steno Larsen “The outcome of 2024 is still up in the air, but credit indicators do not look pretty ahead of next year when we combine the impulse in China, the US and the Euro area in an aggregate model and judging from the central bank behavior, we see a lot of similarities to 2007 across the BoJ, the Fed and the ECB.” 🍀🍀🍀

⚖️ Fed Meeting in Focus: Will Rates Hold Steady? 🤔 The US Federal Reserve meeting is underway, with markets on edge regarding the interest rate decision. * Market participants largely expect rates to remain unchanged this week. * This would mark the sixth consecutive meeting with no rate adjustment. * The Fed is likely monitoring inflation trends before making any changes. Investors in stocks and cryptocurrencies are closely following the outcome, as it can impact asset prices. Stay tuned for updates on the Fed's decision! #FederalReserve #InterestRates #MarketWatch #FinancialNews https://lnkd.in/geYh5xyr

Chairman Powell's press conference aimed to synchronize the Fed's policy trajectory with market expectations, emphasizing ongoing discussions about potential rate cuts and reflecting this sentiment in the dot plot with three projected cuts. The ensuing market response, however, proved unexpectedly pronounced, prompting subsequent efforts by FOMC members to recalibrate and mitigate the unintended consequences of the initial statement. This underscores the delicate balance the Fed faces in managing market perceptions and economic stability. #FedPolicy #Economics https://lnkd.in/g7zU82G5

The Federal Reserve on Wednesday voted unanimously to keep its monetary policy unchanged at its 5.25 to 5.5% target range, and to continue to significantly reduce its securities holdings. This marked the second time the Fed has paused since starting its 525 basis point rate hike cycle in March 2022. While the decision itself was widely expected, we think Fed Chair Jay Powell's commentary and the updated Fed projections effectively confirms that the Fed's hawkish bias remains in place. That sent the two-year US Treasury yield to as high as 5.2%, a new 17-year high, while the dollar rose against a basket of currencies, and equities slipped. Here are the key points and the investment implications:

🛑 The Federal Reserve Sent a Surprise Signal: Caution on September Rate Cut In an unexpected move, the Federal Reserve has indicated a cautious stance towards a rate cut this September. Investors were taken aback as the Fed's approach seems more conservative than anticipated. Here are the key takeaways: 🔹 The Federal Reserve remains cautious despite market expectations for a rate cut. 🔹 Economic data is being closely monitored, indicating a measured approach towards monetary policy. 🔹 Inflation rates and employment figures are vital factors influencing this decision. This cautious tone has significant implications: 1. 📊 Market Volatility: Investor uncertainty could lead to increased market fluctuations. 2. 💼 Economic Stability: Ensuring balanced decisions to maintain economic steadiness. 3. 🔍 Wealth Management: Advisable for investors to stay informed and agile. 💡 How will this affect your investment strategies? What are your thoughts on the Fed's cautious approach? #FederalReserve #InterestRates #EconomicOutlook #MonetaryPolicy #Investing #Finance #MarketTrends Read More:

Comments by Franck Dixmier, Global CIO Fixed Income at #AllianzGlobalInvestors, ahead of the Federal Open Market Committee (FOMC) meeting on 19-20 September Key takeaways: - We do not expect a rate hike from the Fed at its 19-20 September meeting. - The Fed has entered the most mature phase of its monetary tightening cycle. - The markets' attention will now be focused on the potential timing of a first rate cut in 2024. #NavigatingRates #FED #FOMC #centralbanks #monetarypolicy #inflation

Comments by Franck Dixmier, Global CIO Fixed Income at #AllianzGlobalInvestors, ahead of the Federal Open Market Committee (FOMC) meeting on 19-20 September Key takeaways: - We do not expect a rate hike from the Fed at its 19-20 September meeting. - The Fed has entered the most mature phase of its monetary tightening cycle. - The markets' attention will now be focused on the potential timing of a first rate cut in 2024. #NavigatingRates #FED #FOMC #centralbanks #monetarypolicy #inflation

Comments by Franck Dixmier, Global CIO Fixed Income at #AllianzGlobalInvestors, ahead of the Federal Open Market Committee (FOMC) meeting on 19-20 September Key takeaways: - We do not expect a rate hike from the Fed at its 19-20 September meeting. - The Fed has entered the most mature phase of its monetary tightening cycle. - The markets' attention will now be focused on the potential timing of a first rate cut in 2024. #NavigatingRates #FED #FOMC #centralbanks #monetarypolicy #inflation