Saturday, November 26, 2022

The Fed’s aggressive talk is not stopping and the market is expecting a rate cut next year.

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US stocks closed slightly higher on Friday amid repeated comments from Federal Reserve (Fed) officials about voting.investPeople don’t care. The Fed will release the minutes of its last meeting next Wednesday, and investors are clearly more worried about next year.raise interest ratessteering clue. And with Thanksgiving on Thursday and the Black Friday shopping festival the next day, investors are also watching to see whether consumption remains strong as the Fed cools the economy.

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S&P 500indexThe Dow Jones Industrial Average rose 0.5 percent and 0.6 percent on Friday, while the Nasdaq Composite was little changed, barely above flat. The Philadelphia Semiconductor Index rose 0.2 percent. At the end of the week, the S&P and Nasdaq were down 0.7% and 1.6%, respectively, the Dow was flat, and the Fibonacci was up 4.2%.

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TSMC’s ADR rose nearly 1% on Friday, and is up 11.4% for the week, showing double-digit growth for two consecutive weeks.

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Collins, president of the Federal Reserve Bank of Boston, said on Friday that there is no evidence that price pressures have eased, and the Fed may still not be able to rule out another 3 yards (0.75 percentage points). St. Louis Federal Reserve Bank President Pollard also said Thursday that the Fed would have to raise interest rates to “at least” 5%-5.25% to contain inflation.

The US 10-year Treasury yield rose to 3.817 percent from Thursday’s 3.774 percent on hawkish comments from Fed officials. However, some investors in the stock market believe that the Fed officials’ hawkish comments may not mean that the final peak of interest rate hikes is further than expected. Traders are still betting that the Fed will cut rates in the second half of next year.

Keith Lerner, co-chief investment officer at Trust Advisory Services, said the two executives “made some very aggressive comments, but the market took it positively. It didn’t weigh on the market the way it has in the past.” “

Quincy Crosby, chief global strategist at LPL Financial, said: “The Fed’s mission to curb inflation is far from over. The market is not deaf, but there is more and more evidence that inflation has peaked. Traders and investors are seizing ready for.” On the 14th of this month, the Fed’s interest rate hike opportunity will drop to 50 basis points.

In an environment of cooling inflation and investor optimism that the chip industry is nearing bottom, Phi Ban has rallied 26% from this year’s low in mid-October. “Stock God” Buffett’s Berkshire disclosed this week that it spent nearly US$5 billion buying TSMC’s ADRs last quarter, also boosting investor sentiment.

While the U.S. With stocks rebounding on optimism about recessionary inflation and a soft landing for the economy, consumers may find that all the dishes on the Thanksgiving table are up next week, thereby adjusting their expectations for inflation.

Whether the US economy is headed for a soft or hard landing depends on how the Fed interprets the economic data. The Federal Open Market Operations Committee (FOMC) will release the minutes of its last meeting next Wednesday. Bloomberg economists believe a small number of FOMC members, headed by Fed Vice Chairman Barnard, are concerned that the Fed faces the risk of being overly tight. The market expects the Fed to cut interest rates next year.


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