Jan 27, 2022
(1/27/22) Markets tanked after Fed Chair Jerome Powell's
pronouncement of the FOMC's heightened response to the economy with
"sooner & faster" rate hikes. In reality, there was very little
change from past Fed meetings, but in the presser afterwards, when
Powell uttered those two words, markets collapsed and gave up all
their gains. The bottom line: The Fed is going to hike rates and
reduce its balance sheet, sooner than later, and more rapidly than
expected. The problem for the Fed now is, the Yield Curve is
already sharply declining, suggesting more economic weakness to
come. The Fed doesn't want to get caught with 0% rates and a $9-T
balance sheet when a recession hits, essentially with no tools to
manage the economy. So which are the lesser of two evils: Raising
rates heading into a disinflationary environment, and creating
financial instability...but being able to back off those rates and
re-expansion of its balance sheet? Meanwhile, where do investors
park money? We look at some major players: AAPL, CMCSA, MSFT,
- Hosted by RIA Advisors Chief Investment Strategist, Lance
Roberts
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