Forecast: The Fed will raise rates by 0.75% today.

2022년 6월 15일

Why?

1 - inflation came out higher than expected

2 - long-term inflation expectations in America have risen to 3%+, and this is already dangerous. This means that people begin to think that inflation is with us for a long time, behave accordingly and exacerbate inflation even more. This must be stopped

3 - on Monday, the Wall Street Journal and other media published articles that 0.75% will be seriously considered. Most likely, this is either inside information or a controlled leak in order to prepare investors a little.

Is 0.75% good or bad?

To fight inflation - good, for the economy - bad.

If, as a result, the rate increase will be not by 0.75%, but by 0.5%, then vice versa.

Both that option and the other options have a downside.

Therefore, we think that immediately after the meeting, the markets may well rally on the joys of the fact that the meeting is over. In addition, investors always find a dose of painkiller and sedative in Powell's speeches.

But tomorrow, as has happened more than once the day after the Fed, a downward reversal is quite possible, especially since a giant expiration awaits us on Friday, and this is always pain and hassle, so many will prefer to jump off in advance.

We will be buying aggressively in the S&P around 3500 on futures, but for now we will limit ourselves to fast trades.