Dr. Buntham Rajitpinyolert
FB: MacroView
command 10 Fed end of the year 2022
This week, the US Federal Reserve has a key monetary policy meeting. That should be a summary of the Fed’s stance and opinion on investment strategy here.
1. You may have to stop hoping the Fed will ease interest rates this year: After this September’s Fed meeting, there will be two more Fed meetings left this year. And likely to increase by around 0.75-1.25 percent, so if anyone is hoping that the Fed will stop raising interest rates this year. He may have to give up this idea first. Also, if anyone thinks the Fed will reverse interest rate cuts early next year. such hopes may have to be tempered to a lesser degree
2. It is like having to decide that a recession in the United States may eventually occur for the next period: Based on US CPI inflation figures released last week. Therefore, it should be estimated that the inflation rate of the United States has not reached its peak during theThis, therefore, means that the Fed will continue to raise interest rates for a long time only. It is likely that this will not be enough to push inflation back to 2 per cent, so the Fed may need to hold back on raising interest rates even if the economy slows into a recession which imminent or actual recession. That would be enough to bring the inflation rate down to 2 per cent as targeted.
3. The unemployment rate is likely to return as high as 5 per cent this time: The fact that the Fed raised interest rates so much that it could or could cause a recession in the United States was one of the inevitable consequences. is that the unemployment rate will rise until it is likely to end up above 5 per cent for this round
4. Even if the situation is of supply bottlenecks or Supply Chain Disruption It will begin to fade, and it is likely that the rate of inflation caused byit will decrease quite quickly. However, inflation was also caused by the services sector. After the United States opened a full city. that will also come up quickly and powerfully to compensate for the inflation caused by a reduction in the number of goods
The Chairman of the Fed, Jay Powell, will play the role of former Fed chairman Paul Volcker in the 80s. in the fight against historically high US inflation. For this economic cycle Powell praised Volker’s courage in fighting inflation. In the opening remarks at the last Jackson Hole meeting He considered Volker as a role model for the Fed’s role in the fight against inflation.
6. The top US policy interest rate or the final rate This round should not be less than 4.5 percent. Here, despite the Fed’s huge rate increase and interest rates already rising to around 3 percent after the Fed meeting in September. However, inflation has not yet peaked, so the final rate, said to be less than 4 percent, should rise to at least 4.5 percent.
7. US stock indices are unlikely to reach the lowest level. At this point, if you consider the P/E here, which is at the same level as during January 2020 or before COVID. Along with the earnings forecasts of each company in the US stock market, most of the survey results have rather small forecasts. It is hard to deny that the current US stock market index has probably not reached its lowest level this round.
8. You should probably stay away from US growth stocks or tech stocks for now: With the Fed’s interest rate hikes that continue to exist. So the US technology stock index may not be at its lowest point here either.
9. If you think you will invest in the long term in personal opinion There is an opinion, for the end of this year or next year, to accumulate gradually to buy US stocks, thinking that it will be better than buying all over the place during this period
10. The Fed is still believed to be fighting inflationIn this round, it will probably hurt, but it’s over. But the question is, how much will it hurt?
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