Calmness to all
Today marks the largest decline in the stock market since March 2020 - due to COVID.
But for some reason, I am calm and not panicking.
Moreover, for some reason, I think that on May 7, the chances of a rate cut by the Fed will significantly increase against the backdrop of even a possible rise in inflation. Although as of March, inflation is unlikely to be high ... and the Fed will hold a meeting before the April inflation data.
Such possibly strange actions by the Fed can be explained by the effect of the crisis. During COVID, a lot of money had to be printed, and the rate was 0... The Fed understands that lowering the rate immediately sharply reduces panic effects in the markets... And this is much better than driving the situation into a crisis with their actions... Especially when you have a rate of 4-4.5% with inflation below 3%... Look, the ECB has already lowered the rate below 3%.
In addition, today there was also news that the Saudis are increasing oil production, which is also down -5% today. This means that additional inflation in the US is controllably weakened by energy deflation... Which means that in the medium-term range, everything points to a possibility of trend reversal.
So, calmness to all 👌
Today marks the largest decline in the stock market since March 2020 - due to COVID.
But for some reason, I am calm and not panicking.
Moreover, for some reason, I think that on May 7, the chances of a rate cut by the Fed will significantly increase against the backdrop of even a possible rise in inflation. Although as of March, inflation is unlikely to be high ... and the Fed will hold a meeting before the April inflation data.
Such possibly strange actions by the Fed can be explained by the effect of the crisis. During COVID, a lot of money had to be printed, and the rate was 0... The Fed understands that lowering the rate immediately sharply reduces panic effects in the markets... And this is much better than driving the situation into a crisis with their actions... Especially when you have a rate of 4-4.5% with inflation below 3%... Look, the ECB has already lowered the rate below 3%.
In addition, today there was also news that the Saudis are increasing oil production, which is also down -5% today. This means that additional inflation in the US is controllably weakened by energy deflation... Which means that in the medium-term range, everything points to a possibility of trend reversal.
So, calmness to all 👌
