As expected, the Fed raised interest rates by 75 basis points at the November meeting, bringing the federal funds rate to a range of 3.75% to 4.00%.
Powell hinted that the pace of rate hikes may slow, but the peak interest rate will be higher and remain high for a longer period. This 'higher and longer' hawkish stance indicates that monetary tightening is far from over; last night, the Nasdaq plummeted 3.4% in response.
This statement aligns perfectly with Guo Erxia's previous predictions.
The Fed will definitely raise interest rates above 5%, and the Nasdaq will drop below 10,000 points.
Based on this judgment, I've kept my dollar bullets untouched, waiting for a cheaper entry point. At most, I play some short-term trades to stay familiar with market sentiment. Right now, buying U.S. bonds yielding 4.5% feels pretty good too. In an economic downturn, missing out is better than making mistakes.
Most retail investors trade stocks driven by news: a positive headline prompts them to 'rush in,' while negative news makes them 'cut losses.' For more sophisticated investors, those so-called 'news, reports, research papers' aren't reasons to buy or sell. Instead, they look beyond surface-level information to assess whether the original logic behind their purchase has changed, verifying if their prior holdings and strategies remain valid and require adjustment.
Despite recent volatility in U.S. stocks, the Fed’s need to curb inflation remains constant, meaning the underlying logic hasn’t changed.
Even the most optimistic military observers believe the Russia-Ukraine war won’t end anytime soon, thus continuing to drive up commodity prices due to supply gaps...