What Will the Fed Say--and how will markets respond?

2 years ago
3

(5/3/22) The next Fed meeting is tomorrow, at which the FOMC is expected to hike rates 50-basis points, and reduce its balance sheet by $90-Billion starting in June. But what if they don't? What if the Fed says it's raising rates by 75-basis points, and issues a much more hawkish view on inflation? That's the risk markets are facing as they try to position ahead of the meeting. With markets so negatively biased, any news that matches expectations will be viewed as GOOD news, and markets could rally back to the 50-DMA from here. Markets are very over-sold on multiple levels; so any news that's not bad news could trigger a reflexive rally. Additionally, the blackout window for corporate share buybacks closed, which could allow for up to $5-billion a day worth of trading, and more upward lift for stocks for the next six weeks.

Hosted by RIA Advisors' Chief Investment Strategist, Lance Roberts, CIO
Produced by Brent Clanton
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