Stay Up to Date with Robin's Market Updates

By providing us your personal data (i.e. name, email address and phone number), you acknowledge and consent to our collection of your personal data for the purposes listed below: • Sending you marketing, advertising or promotional materials related to the content of this website, whether by call, text or email; • Provision of products & services which you have requested for. Please note that you are entitled to withdraw your consent for the collection of your personal data at any point in time by clicking on the "unsubscribe" link in the emails you receive. You may also contact us via robinhosa@phillip.com.sg

Wednesday, December 19, 2018

Fed Meeting Tonight - Most Watched In Years .... How will it affect the market?

Trump’s Jerome Powell-focused tweets has blasted the Fed for two days running, calling for officials to cease raising interest rates, a level of public pressure no president has put on the Fed in decades.

Federal Reserve began a two-day policy meeting Tuesday, perhaps its most scrutinized session in years. While sentiments on the stock market has been weak, the U.S. jobs market is still strong and the outlook for 2019 is relatively solid, so the case for a hike hasn’t disappeared. 

However, it raises the issue of Federal Reserve policy, which has become more politicised and in this respect, Powell’s comment in a speech at the Economic Club of New York that interest rates remain “just below the broad range of estimates of the level that would be neutral for the economy” has, not surprisingly, been interpreted as dovish by the markets. This is why current market expectations of only two more rate hikes (including December) by the end of 2019. 

Many traders are expecting the Fed to say something dovish tonight that will give the market a “Santa Claus” rally towards the year end. Sifu think this view carry with it much risk, because if Fed signal a pause, it would have been expected, worse still if Powell give in to Donald’s pressure and decide not raise rate tonight , the market will crash for fear that the central bank now see that a recession is plausible.
All posts and charts are for educational and illustration purposes only

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.