Federal Reserve

[md2018]

In Dec 2018 the Federal Reserve raised interest rates (I believe about .25 points) and the C and S fund dropped about 15% during the following week. Any predictions on what happens if they announce tapering at next Tuesday’s meeting?

[KTSPcalc]

They have foreshadowed tapering for months and months and Powell has been getting more and more explicit about it happening. I'd like to think that tapering is priced in, but markets are often irrational so who knows.

[bloobs]

They have foreshadowed tapering for months and months and Powell has been getting more and more explicit about it happening. I'd like to think that tapering is priced in, but markets are often irrational so who knows.

It's hard for me to fathom the whales pricing in fed tapering impacts, given the S&P is just a percent off ATH after a 100% rally from its March 2020 lows--but what do I know?

[anomadtoo]

They have foreshadowed tapering for months and months and Powell has been getting more and more explicit about it happening. I'd like to think that tapering is priced in, but markets are often irrational so who knows.

this

[Bubba]

If you want a good read on what to expect from different central bank chairmen/women, check this out:

https://financialpost.com/opinion/jack- ... oes-matter

I'm not in agreement with the opinion piece, but the paper he cites and the summary he gives of that paper are solid. In fact, I recently spoke with one of the authors of that paper (again, not the opinion piece author) and discovered that my hunch was right. Conservative central bank governors tend to raise rates prematurely and liberal central bank governors tend to do so more slowly. Given this being the case, I'm going to be much more careful next year...

Note: if you want to talk politics about this, please feel free to do so in another thread. This is just objective data...not opinion.

Best,

Bubba

[wingchaser]

Market on verge of breaking new ATH(s), in lieu of FED NEWS…

Hoping this is a precursor of a STRONG SANTA RALLY to close out an (otherwise) STRONG YEAR!!!

Best of Luck (everyone) in all you choose to endeavor!!!

[Bubba]

Market on verge of breaking new ATH(s), in lieu of FED NEWS…

Hoping this is a precursor of a STRONG SANTA RALLY to close out an (otherwise) STRONG YEAR!!!

Best of Luck (everyone) in all you choose to endeavor!!!

That's my hope...for a strong Santa rally. It's a bit overdue for me.

I'm not holding my breath for next year. Some of the guys I follow are claiming Jan - Mar will be bad, others say they'll be marching higher. Go figure!

Best,

Bubba

[pilotric99]

I think 2018 might be a good reference year. The Fed raised rates 4x that year. The S and C fund finished the year -9% and -4.4%, respectively.

https://www.inman.com/2018/12/19/fed-ra ... e-in-2018/

The 3 strategies I look at, which are all low 30's means w 5-7 SDs, all finished 2018 at 24-27% return.

FWIW.

[md2018]

I think 2018 might be a good reference year. The Fed raised rates 4x that year. The S and C fund finished the year -9% and -4.4%, respectively.

https://www.inman.com/2018/12/19/fed-ra ... e-in-2018/

The 3 strategies I look at, which are all low 30's means w 5-7 SDs, all finished 2018 at 24-27% return.

FWIW.

I guess for next year it depends when they actually raise rates, so timing in 2018 may be different than for 2022. We will also be dealing with high inflation but the idea sounds good. S fund has already dropped 14% since Thanksgiving. Are we headed for a 20% loss?