A SIGNIFICANT SHIFT RATE HIKE POLICY
![pexels-rodnae-productions-8369687.jpg](https://steemitimages.com/640x0/https://cdn.steemitimages.com/DQmPxbUQqX1NYHFzBazi14zfSDPhDCRQ1eutKjpVHxajgp1/pexels-rodnae-productions-8369687.jpg)
The FED states a target of 5.1% which could indicate 2 more than 0.25%. 0.25% rate hike in February and March and then 0.1% in April. This means the 5.1% is true, April will be the last month of rate hikes assuming inflation does continue to fall. The number for inflation for December showed that inflation is still falling to 6.5% which is down from 7.1% in November and down from 9.1% in June. This would seem to indicate that the federal reserve is currently winning the war on inflation for now. But the inflation target from the FED is about 2-3%, so we still have a long way to fall inflation-wise to reach that.
The big question here is, What will happen if the rate hike stop? The short answer is, nobody knows but the speculation is that we could get a boom period between now and later this year rate cut eventually start again. The market love certainty and rate have kind of been flat, we will be in another bad situation, and the market needs a narrative to grab onto. During the time of high interest in the year 2,000, we saw S&P 500 up 1,000%, we saw the Nasdaq go up 1,000%. It kind of feels like the whole FED pivot could already be in effect here too based on the anticipation of a 0.25% rate hike to be announced next week.
Then we come into the potential for the rate cut later this year or next year. Currently, the FED is predicted to bring the rate down to 4.1% in 2024 and 3.1% in 2023. All this largely depends on how much damage the rate hikes have as actually done. Markets are currently pricing and the best-case scenario is a potential return to normal on inflation in the coming months and a potential soft landing.
https://twitter.com/Opopa13938978/status/1618703701459492864?s=20&t=PCPKMctDCVdekrCFzU4dIA
thanks for sharing your thoughts on