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By: Tom Gentile
on February 2nd, 2022
Did Fed Chair Powell surprise or did he say what he forecasted he’d say?
The expectation was the Fed would not raise rates today. And they didn’t, so no surprise there.
Expectations of the first quarter point hike possibly happening in March was re iterated to day so no surprise there.
What was a surprise is the prospect of how many rate hikes are possible this year. It seems there is a possibility now for them to increase from 3-4 times up to as much as 5 of times.
The words Chairman Powell used was they have “quite a bit of room” to raise interest rates before it would hurt the labor market.
The markets were trading higher on the day for the third day in a row up until after the Fed decision and then they all reversed course and traded lower on the day. It seems shorter term – selling strategies may be the way to go.