To start with the conclusion: The Fed may be nervous that its rigid interest rate policy is cooling the economy, but it doesn’t want to calm its two mandates: inflation and the labor market. The central bank is raising with a three-quarter decision, but has a vague and confusing history.
And the prices don’t know what to do with it and joke in all directions. Yes, the Fed is raising interest rates by three quarters as expected. See the headline above this first message straight from the press release, the bank is unsure whether to keep accelerating. This is new and devil and that’s what the prices are in the first place.
Message an hour later, this already sounds different:
After the press conference we look again:
After a year there is not much to see, the market certainly takes note of greater caution #Poweredbut that doesn’t seem like a game-changing decision https://t.co/oJtBQHh2C8 pic.twitter.com/gX6U4WwkzY
– Arend Jan Kamp (@ArendJanKamp) November 2, 2022
This is President Jerome Powell’s speech, in fact it is not that diabolical. Confusing quotes, just like the ECB, the Fed doesn’t know …? Yes, the economy is slowing, but inflation and employment just don’t want to go in the right direction. Powell does not want to say anything concrete about the next steps in interest rates.
Let’s say cuckoo, the stocks are turning red. The Fed’s review will be rough, this is a poorly communicated interest rate decision. And we as investors and traders are no longer wise. Perhaps this is mainly the message of the price antics.
The market doesn’t know what to do #Powered with many on the one hand and on the other on inflation and interest rates. Is it evil or not? See here dollar (orange) and 10-year US interest, what a mess #AEX pic.twitter.com/NMtBM9wCEh
– Arend Jan Kamp (@ArendJanKamp) November 2, 2022
The final verdict of the market, three quarters is valued a little less enthusiastically for the next interest rate decision. That’s all.
Follow Powell’s press conference here from 7:30 pm until 8:30 pm at the latest.
