Tags: federal reserve | interest rates | jerome powell | retirement savings
OPINION

Nigel Green: Markets Will Rocket if Fed Signals Rate Rise Slowdown

Nigel Green: Markets Will Rocket if Fed Signals Rate Rise Slowdown
(Dreamstime)

Nigel Green By Wednesday, 02 November 2022 07:23 AM EDT Current | Bio | Archive

Stock markets will rocket if the Federal Reserve signals it will slow down its rate-hiking agenda during Wednesday’s policy meeting

The prediction comes ahead of the close of the U.S. central bank’s two-day meeting at which it is widely expected to raise its benchmark interest rate by three-quarters of a percentage point, or 75 basis points, for the fourth consecutive time.
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Markets always look ahead — and we expect them to be boosted by a Fed which is facing growing pressure to stand down on interest rate hikes.
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The markets have already priced in that the Fed will hike its baseline interest rate range by another 0.75% Wednesday.

Investors will be listening carefully to the words and tone of Federal Reserve Chairman Jerome Powell. It’s not so much about the percentage points now. Much more important is what is said, how it is said, and how it is perceived.

We expect Powell to sound hawkish as he reasserts the Fed’s vow to fight still stubbornly hot inflation.

Whilst this would normally create jitters in stock markets and push bond yields higher, it might not happen this time.

This is because we also expect the Fed will signal that it will slow down its rate-hiking pace before finally winding it down in, possibly in March.

This prospect will excite the stock markets.

Powell will be walking a fine line on Wednesday of trying not to get the markets too excited about the potential scenario of less aggressive rate-hiking — hence the likely hawkish tone he will still adopt.

The central bank’s rate rises have prompted a significant drop in home sales and the first real price declines in more than a decade. Wage growth has put off firms hiring and investing.

Although the Fed will still want more hard data, there’s certainly a feeling that we’re moving in a direction toward the central bank being able to take its foot off the brake of the economy.

Markets always look ahead — and we expect them to be boosted by a Fed which is facing growing pressure to stand down on interest rate hikes.
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London-born Nigel Green is founder and CEO of deVere Group. Following in his father’s footstep, he entered the financial services industry as a young adult. After working in the sector for 15 years in London, he subsequently spent several years operating within the international space, before launching deVere in 2002 with a single office in Hong Kong. Today, deVere is one of the world’s largest independent financial advisory organizations, doing business in 100 countries and with more than $12bn under advisement. It specializes global financial solutions to international, local mass affluent, and high-net-worth clients. In early 2017, it was announced that deVere would launch its own private bank. In addition, deVere also confirmed it has received its own investment banking license.

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NigelGreen
Stock markets will rocket if the Federal Reserve signals it will slow down its rate-hiking agenda during Wednesday's policy meeting. The prediction comes ahead of the close of the U.S. central bank's two-day meeting at which it is widely expected to raise its benchmark...
federal reserve, interest rates, jerome powell, retirement savings
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2022-23-02
Wednesday, 02 November 2022 07:23 AM
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