since the past “Fed raising interest rates” affects the economy to slow down. This is in line with most analysts who see the US economy heading into recession next year.
But the bond market is in the opposite direction. due to rising bond The 10-year bond yield in the United States turned around to rise to 3.77% and there is still a risk that the long-term bond yield could rise. If reports on US economic data such as labor market data or inflation data Still supporting the trend of the Fed continuing to raise interest rates until it can exceed 5%.
along with the status of the main artery of the “dollar” currency That’s still there, which means it’s the main currency the world still has the confidence to hold as a reserve. And is used as an intermediary in the exchange of goods today.
Create Monetary Policy Actions by the Federal Reserve That, be it in the way “good or bad” It is inevitable that it will affect the global economy and investment.
However, on the way before arrival Last Fed meeting of the year (Dec. 13-14) Where the Fed will announce a new policy rate forecast or Dot Plot, another risky asset that will keep an eye on the results of the Fed meeting. “Digital assets” Still facing volatility, so what should investors do!
“Nattanan Bangsomboon” Chief Investment Specialist Investment Unit Securities Brokerage (SEC) Finnomena Co., Ltd. Special interview with “Krungthep Business” that such issues, if you look back before the Fed meeting in November About 1 week ago, the market is still very optimistic that a drop in oil prices And there will be concerns about the economy which is slowing putting pressure on the FOMC to slow down its aggressive stance on monetary policy.
at least Interest rates are expected to increase in November last. This will be the last increase in the policy rate of 0.75% in December. It will raise interest rates by just 0.50% and gradually decrease. Until it ends in the second quarter of 2023, and when the economy slows down, the FOMC will return to cutting interest rates to stimulate the economy again before the end of 23.
but the final result What happened at the last FOMC meeting? it can be said that on the whole, it is quite far behind the expectations of the market. Basically just a 0.75% increase in interest rates to a range of 3.75%-4.0%, in line with market expectations of 100%.
But other things that the Fed tries to communicate It can be said that it is completely wrong with the positive expectations of the market. In particular, the expectation that the Fed will raise interest rates less gradually is partly in line with the expectation that the FOMC is beginning to consider the possibility.
But it was wrong in many ways. For example, Fed Chairman Jerome Powell, as the representative of the Fed, clearly stated, based on the latest data, It is too early to think about stopping interest rates. And there’s still a chance it can happen far (ways to go)
If “Jerome Powell” confirms the original gesture with the new words High inflation has a greater impact on the labor market than raising interest rates, making the Fed too ready to tighten monetary policy. It is better than being too tight or relaxing too quickly.
But nevertheless, Jerome Powell has not ruled out the possibility of a gradual decline. tone down in any way After all, the Fed has firmly restated its Data-Driven Principles through carefully drafted and revised statements that:
“When considering future interest rates the Committee will carefully consider the cumulative effect of past monetary policy, the impact on economic activity and inflation of a delay in monetary policy. as well as economic and financial developments.”
Fed repeats decision on data dependent
“Nathan“look at that The Fed reiterates that it will make decisions based on the information it receives. Very important for investing in digital assets.That is, the Fed chose to leave the channel open, giving the Fed the ability to conduct monetary policy more flexibly according to the situation.
Both are in the current mode which is trying desperately to bring down inflation. prevent effects on employment or the economy in the long term
both in a way where inflation could have started to slow down But I’m not sure yet.can handle“Real or not, we can freeze the interest first.
Until the Fed judges the economy will be affected too much. and inflation is below target He was able to reduce interest. Improve liquidity to stimulate the economy
see that “flexibility” This will help reduce charges. and suspicion of the Fed, which used to be often labeled “behind the curve,” for its continued assertion that inflation is only temporary. Before the change of attitude at the end of 2021, the change of attitude was an attempt. The “lull” of the market a unable to take the market Until finally having to accept the truth that inflation is no longer “temporary”
The Fed’s “unfriendly” stance on trend-driven investors
However, such an attitude is not very friendly to investors like us. Trend investors due to Data Dependent will cause various reported economic numbers, especially employment, income, inflation and economic outlook to continuously create volatility. Difficult to run the trend
Therefore, in terms of speculation It may be more suitable for investors who play rounds or swing trade, especially digital assets that fluctuate higher than conventional assets that may cause more frequent rounds. For long-term investors, they may use a gradual accumulation of small amounts of wood. in order to manage the risk, don’t go too hard But don’t miss the price which is not very high.
finally look at “Until the Data Dependent Fed” puts pressure on the Fed to reverse course. And at that moment, Fed and we will win together.