Today I posted my two-hundredth YouTube video: Federal Reserve: Mind the Gap!
Today is Ground Hog Day for the Federal Reserve. The U.S. central bank will announce whether or not it sees its shadow. It’s predicted to announce a 75 basis point increase in interest rates. However, there’s no revision of projections on interest rates, inflation updates, or GDP growth assessments scheduled for this meeting. Which leaves Wall Street free to speculate until the Fed’s December 14 meeting with those Dot Plot projections. During this “gap” in Fed guidance, investors are speculating on a pivot from the Fed’s policy of raising interest rates to either a pause or an outright reversal that moves to cut rates. This speculation, along with seasonal trends, has led to a rally that is now feeding itself as portfolio managers try to take advantage of this end-of-the-year bounce. However, I believe that the idea the Fed will pivot soon is incorrect and we’ll see another leg of the bear market starting around January. Because of this, I’d suggest not putting any new money in the market and instead waiting for upcoming lows as the Bear Market continues through 2023 to a bottom sometime that year or in 2024. And do remember that we get jobs numbers for October on Friday.
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