What You Need to Know After Today's Fed Meeting

The big surprise for later 2022 could be a calming of inflation

Managing Editor
Mar 16, 2022 at 2:53 PM
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The Federal Open Market Committee's (FOMC) highly anticipated meeting will conclude at 2 p.m. on today, March 16, with comments from Fed Chair Jerome Powell about monetary policy and the overall state of the U.S. and global economy. CME Group's FedWatch tool projects a 25-50 basis-point rate hike from the central bank at the meeting's conclusion.

It's safe to say all eyes are on the Fed. With Russia's invasion of Ukraine, inflation spiking stateside, and Covid-19 cases dropping, the Fed's actions and subsequent comments will go far in shaping how the rest of the year unfolds. To help unpack this monumental week for Wall Street, we asked Nick Ayala, Managing Partner at Integrity Marketing Group, to weigh in with some broader thoughts on the matters at hand.

This is part five of a mega-Fed series!

"The current Russia and Ukraine war has been felt in the markets over the past 2.5 weeks and there’s no telling if we will see the market fall another 15-20%. With fear always being a larger factor than anything for investors, market volatility will weigh more on the war progression than rate hikes in the coming weeks/months. Markets have already built in the rake hike news and market makers understand this. With many retail portfolios down substantially, we should all still keep in mind the unmatched bull market over the past 10-11 years as well as the 20%+ increase in markets in 2021.

We should expect some talks about the rapidly increasing oil prices and the massive oil reserves that are being rolled out to try and keep prices at the pump going even higher. The Federal Reserve and Bank of England have also forecasted to raise rates by a quarter point in March. However, due to the Ukraine crisis, markets saw a high probability both would opt for half-point moves.

The sooner we see (if at all see) a Russian/Ukrainian agreement, we should witness the fed move forward as planned with their agenda. However, if the war progresses and has more global impact, more impact on oil prices and increasing impact on inflation – supply chain, we could see the Fed pull back with such aggressive frequent hikes. Either way, retail investors are moving into bonds and gold as international sanctions are increasing and market fear rises."

*This article is published for purely informative purposes. Ayala's opinions are not necessarily a reflection in any way of those of Schaeffer's Investment Research. We publish information about companies in which we believe our readers may be interested. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalized advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as SIR's solicitation to effect, or attempt to effect, any transaction in a security. Investments in the securities markets, and especially in options and futures, are speculative and involve substantial risk. The information that we provide or that is derived from our website should not be a substitute for advice from an investment professional. We encourage you to obtain personal advice from your professional investment advisor and to make independent investigations before acting on the information that you obtain from SIR or derive from our website.*

 




 
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