By: Tom Gentile
on March 15th, 2022
Expectations of the Fed this Week
There seems to be much more anticipation for this weeks Fed Meeting than in recent ones. Large in part because it is expected the Fed will raise the short-term interest rates by at least a quarter of a point.
They are also expected to give an update on their winding down or reduction of their buying programs that have been largely attributed to the reason the markets have performed so bullishly the last part of last year and prior.
They are also going to talk about reducing their balance sheet.
What to do Ahead of the Fed
I am not that active the day of the Fed announcement.
Are we going to see a bunch of buying prior to the announcement only to sell off after Chairman Powell speaks / makes the announcement.
This would be a classic Buy the rumor, sell the news situation.
There are also times where the price action in the markets is a but muted, meaning there isn’t a clear directional trend going into the announcement. Then the announcement hits, Powell starts speaking and then things ramp up lower or higher.
I feel it is best to keep my powder dry in the sense, I am not going to add to my positions or add any new positions until after the announcement and I can get a gauge on how the markets are digesting that news and reacting.
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