‘Kobsak’ reveals that the Fed is following the appointment Another interest rate hike of 0.75% and a further signal to slow the rate hike again, highlighting seven issues, ‘the Fed chairman said’, causing the stock index plunged 900 points during the day.
November 4, 2022 – Mr Kobsak Pootrakool, former Minister attached to the Office of the Prime Minister and Deputy General Manager of Bangkok Bank posted on Facebook with the following content:
It’s not over yet, there’s still a long way to go!!!!!
Some ways to go. More ground to cover.
Probably the coldest sentence From the Fed President’s press conference last night.
But it’s a word the market doesn’t like.
crash all over the place
as this sentence means what the market is hoping for
“The Fed is ending its rate hike cycle.”
is a dry dream
tell yourself
Because the Fed didn’t really think so.
As soon as the Fed committee opened the decision
Looks like the Fed is on the right track +0.75%
and sending additional signals as expected The Fed is slowing raising interest rates.
causing the global financial markets to improve
Dow Jones +400 points
Nasdaq +100 points
However, only 30 minutes later
After the chairman of the Fed began the press conference
The indexes were reversed Each roll was film.
Causing the Dow Jones to reverse from +400 points to close at -505 points.
Swing 900 points during the day
The Nasdaq is down again, near the bottom of the year again.
Many people asked what the Fed chairman said. That changed the thinking of the market like this!!!
From listening to the 45 minute Q&A session, I think there are at least 7 major issues that the market doesn’t like.
Story 1 – The Fed Chairman said About the Fed to slow interest rate hikes and increase +0.5% at the next meeting.
Now it’s getting close to that point. But it might be possible during the next meeting or in January.
This means it can be +0.75% again this year, depending on the data released.
Story 2 – Fed policy interest rate May be higher than what was said in Dot Plot in September.
Previously reported at 4.6%, the latest will be more than that.
As a result, markets are predicting that interest rates will reach 5.1% in May next year.
In accordance with the president’s comments several times in those press releases
Some ways to go. More ground to cover.
The interest rate hike is not over, there is still a lot to do.
Story 3 – It’s too soon to stop
Too early to delay
that people like to say “The Fed is close to stopping interest rates.”
The Fed chairman said that It’s too soon to stop now
There are conditions to stop raising interest rates.
Inflation must have fallen significantly several months ago, and the Fed must be confident. Inflation will return to 2%.
Story 4 – If I have to be wrong, the Fed chairman is making a mistake by being “tough-handed” and “giving strong drugs”.
There are always two risks to a Fed decision:
(1) Risk of overpaying for strong drugs until the economy crashes
(2) Risk of dispensing drugs too lightly, stopping too early, causing inflation to take root or come back
if you have to choose You would like to choose the first way, which is a heavy hand, paying too much medicine.
Because in this way, the result is that it will cause an economic recession but you are sure You can stimulate the economy.
The second way If you lose, walk that way.
The Fed has to chase inflation again. and it will be damaged more
Story 5 – Inflation is more stubborn than expected and the US labor market is stronger than expected
Despite the fact that the Fed has raised interest rates
But the number of unemployment It is still the lowest for 50 years.
Inflation has not fallen, Core PCE is 5%.
Wages are still by the wayside not reduced!!!
This means that the interest rate that has been charged is not high enough and must rise again.
Story 6 – I used to hope there would be a soft landing.
Much harder now, much less chance.
A recession is upon us.
Story 7 – Many people have asked about the effect of the Fed’s interest rate increase on the global economy. and those countries
The Fed is watching
But the Fed can prevent inflation. will be the most important
best for the world
Others have to adapt themselves.
Because if the Fed cannot take inflation The damage to the world will be much more serious.
When investors are hit by 7 stories
who used to be secretly happy that the Fed came on time to begin with
So it turns back into film, every roll. as we see
#Exploring the economy with Dr. Kob #Fed
