While some investors expect a dovish Fed, the strategist argues that Powell will instead continue to implement restrictive policy.
Stocks, precious metals, and cryptocurrencies rallied during the first month of the year, and market strategists are saying that markets could retract in the near future if the U.S. Federal Reserve keeps hiking rates and maintaining a broader tightening policy. In three days, on Feb. 1, 2023, the Federal Open Market Committee is set to convene. While the market expects rate cuts, some analysts think the Fed will continue raising the federal funds rate.
Strategist Predicts Potential Market Correction as Powell’s Re-tightening of Financial Conditions is Anticipated Markets are closely watching the next Federal Open Market Committee meeting, scheduled to occur on Wednesday, Feb. 1, three days from now. Last week, Bitcoin.com News on how investors are closely following the decision of Jerome Powell, the 16th chairman of the Federal Reserve. As the FOMC meeting approaches, discussions about the outcome have been widespread on social media.on Jan. 27 that “there will be blood on February 1,” referring to the turmoil that markets may face after Powell addresses the nation.
The strategist expects that the Fed chair will address this topic forcefully on Feb. 1 and shift the conversation towards how long the Fed needs to hold at the terminal rate and why. “Look for him to expand on the lessons of the 1970s,” Carter. “Why the market continues to punch Powell in the face and not expect a counter-punch is beyond me. This is the craziest market set-up right here, right now. There will be blood on February 1.
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