The current context is serious | Forex-Indices-Stocks-Crypto |
Updated
It seems that inflation is considered the devil for the markets, so the focus will be on the next Fed meeting scheduled for March 22nd. Last week we saw a strong increase in NFP and this could be the first sign of a hawkish FED, but this week we will see the second and final sign for the markets: CPI release. These two drivers will complete the big economic figure ahead of the interest rate announcement.
In recent weeks Governor J.P has been under a lot of pressure from the financial community (including Janet Yellen, Treasury Secretary and former Fed Governor) due to the large risk of contraction and the impact of such aggressive monetary policy. But perhaps the news about failure of some banks could prove to be a strong ally of Powell. Why am I saying that? If the Fed's target is to drag the US economy into a mild recession to try and get inflation back to around 2 percent, concern that these two failures could be contagious within the banking sector could help Powell achieve the first target: "bring down inflation...".
Even the geopolitical context should not be underestimated: The war in Ukraine and China-United States tensions over Taiwan.
We will see the impact on the main markets (dollar, SP500, gold...) in the second part of this analysis.
In recent weeks Governor J.P has been under a lot of pressure from the financial community (including Janet Yellen, Treasury Secretary and former Fed Governor) due to the large risk of contraction and the impact of such aggressive monetary policy. But perhaps the news about failure of some banks could prove to be a strong ally of Powell. Why am I saying that? If the Fed's target is to drag the US economy into a mild recession to try and get inflation back to around 2 percent, concern that these two failures could be contagious within the banking sector could help Powell achieve the first target: "bring down inflation...".
Even the geopolitical context should not be underestimated: The war in Ukraine and China-United States tensions over Taiwan.
We will see the impact on the main markets (dollar, SP500, gold...) in the second part of this analysis.
Note
Given the attitude of some moderators towards me, I better take a break from TradingView. Apologies to people who have been waiting for the second and third parts of this analysis.With regard.
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