Just as we expected, following the extremely hawkish comments made yesterday by the Federal Reserve governor, Lael Brainerd signaling for a much faster path of monetary policy tightening ahead, the Volatility Index (VIX) managed to bounce strongly from the ascending and expanding megaphone pattern that we have been talking about on numerous occasions in recent weeks. As a result, we saw a sharp intraday sell-off in yesterday's session for all risk assets. The sell-off in Risk Assets and the continued uptick in volatility (VIX) are expected to further accelerate throughout the rest of this week in anticipation of last month's FOMC minutes as well as the statements of generally much more hawkish Federal Reserve governors like Bullard and Williams later this week.
Lael Brainer has for long been considered as the biggest "dove" among the Federal Reserve governors as she has always supported a relatively easy monetary policy and a slower path of normalizing. She was the Federal Reserve member that was defending the "transitory" definition of the elevated levels of Inflation more than anyone else on the board. So, to se the most dovish Fed member make such a sharp turn in her economic views, projections and overall stance was a huge shock to the market.
Investors should try to relocate their holdings into more defensive, low-multiple stocks of companies with strong balance sheets and high Free Cash Flow levels.
Good luck out there!
Follow us and stay tuned for more detailed market analyses, profitable trading ideas and a consistent portfolio performance.
Sincerely,
Dow Experts Finance
Lael Brainer has for long been considered as the biggest "dove" among the Federal Reserve governors as she has always supported a relatively easy monetary policy and a slower path of normalizing. She was the Federal Reserve member that was defending the "transitory" definition of the elevated levels of Inflation more than anyone else on the board. So, to se the most dovish Fed member make such a sharp turn in her economic views, projections and overall stance was a huge shock to the market.
Investors should try to relocate their holdings into more defensive, low-multiple stocks of companies with strong balance sheets and high Free Cash Flow levels.
Good luck out there!
Follow us and stay tuned for more detailed market analyses, profitable trading ideas and a consistent portfolio performance.
Sincerely,
Dow Experts Finance
