The Fed is slowly reversing

01 December 2022 84
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If we recall the very recent past, namely the Fed's reaction to the risk of economic contraction amid COVID-19 pandemic restrictions, then the Fed's ultra-soft statements about the upcoming stimulus regime long into the future immediately come to mind.

 

By and large, soft policy would still have to be maintained in 2022 and 2023.

 

In any case, that was stated.

 

But the risks of high inflation forced the Fed to move towards tightening much earlier than scheduled.

 

Now history seems to be repeating itself. The previously announced parameters and timing for further tightening will probably only remain in the protocols.

 

In fact, we see that the curtailment of tight monetary policy actually outpaces its own announcement from a high tribune. At the same time, policy reversal itself is a very inertial and long process.

 

However, it now gives a big impetus to the stock market recovery.

A breakout above 4400 would technically signal a break in the bearish trend.

This content is for informational purposes only and is not intended to be investing advice.

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