JICPT| recession fear weighed on markets!
Hello everyone. US 10Y yield has been up by a lot since middle of last year due to inflation issues. US oil posted incredible performance due to supply issues caused by the conflict between Russia and Ukraine.
Now, both of them fell a lot today. I also noted gold also dipped. Only dollar is rising today.
I've been through this several times in the past few years. When everything drops, except the dollar index, investors are concerned about the future growth. The main driver of the market has shifted from the war and inflation to the economy growth.
According to the dot plot, the median year-end projection for the federal funds rate moved up to 3.4%. That's way much higher than previous projection. I remembered a model suggested a possible 40% drop from the high created last year.
Before the inflation got controlled, market will be under pressure due to series of rate hikes. I guess the peak will be around September. The more Fed raises the target rate, the more room it can reduce to spur the economy in the future.
Now, both of them fell a lot today. I also noted gold also dipped. Only dollar is rising today.
I've been through this several times in the past few years. When everything drops, except the dollar index, investors are concerned about the future growth. The main driver of the market has shifted from the war and inflation to the economy growth.
According to the dot plot, the median year-end projection for the federal funds rate moved up to 3.4%. That's way much higher than previous projection. I remembered a model suggested a possible 40% drop from the high created last year.
Before the inflation got controlled, market will be under pressure due to series of rate hikes. I guess the peak will be around September. The more Fed raises the target rate, the more room it can reduce to spur the economy in the future.
Comment:
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