Hi HODLers,
Jerome Powell broke the market for once and I don't blame it... It actually exactly as I predicted yesterday.
What is interesting in this graph is how expectations shifted dramatically in just one quarter! from an expected top of Fed funds at 3.75-3.8% to now 4.5-4.6%!
I could say: "I told you so!" but it won't.
Here is what I wrote yesterday:
I personally believe they will stick to the 75bps BUT they might hint that next time they meet they might do another 75 bps raise if necessary (market is expecting 50bps at the moment).
And this is what they did, they basically said that this hike was the low end of what they might call restrictive policy meaning that there is much more to go. Also, the market was pricing maybe 1% more of raises through the reminder of 2022, it seems it might be closer to 1.25-1.5%.
The economu is slowing down and they are running after inflation which is the worst thing that could happen.
I am sticking with my bearish stance at least for the upcoming month; market did not capitulate yet. I expect corporate profits to drop strongly and layoffs to follow. Once this happen and we have a strong market drop, I will buy the **** out of this crpyto and financial markets :D.
Do you think it is time to Buy the DIP?
In any case, stay safe out there!