So we are finally one night away from the first of many rate hikes of 2022..
At this point market has priced in 20 basis points, however anything more than that would mean Fed and Powell is panicking about sky high inflation of 7.9% and may send the markets crashing.
Additionally, even if the hike is only 20 basis points, its the guidance that will matter the most and if Powell says they are anticipating >5 hikes of 20 basis points this year, we can expect the market to could go to a tailspin and have same kind of volatility like 2018 all over again and could reach the Jan-Feb 2020 highs for SPY and Dow
Add to that 40 year high inflation of 7.9%, supply chain issues, commodity prices rising and first large war in Europe since WWII.
Tomorrow could be a very volatile day and Powell has to walk a very fine line..
I wonder what Powell is thinking right now
What is your prediction for tomorrow’s market?
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