All that matters during the coming week will be the Fed's monetary policy and press conference as the markets will shift their focus towards the timing of the next rate hike cycle. Next Fed objective is to give the market signals that they want to gradually move away from zero percent interest rates policy towards monetary-policy normalization.

In this regard, most likely, Fed is going to remove the the word “patient” from the statement, which was inserted last December to replace the phrase “considerable time”. This being the case there is a strong case for Fed to start gradually raising rates from beginning of this summer but on the other hand, even though Jun can be in cards for first rate hike, Fed will have to play a double language because I'm sure they don't want their actions to disturb the market reaction as the market will try to immediately price in the rate hike, and as such they want market to be less reactive.

We're in adebt bubble crisis and us such Fed action can be the trigger for the bond market crash. Usually bond markets start selling off 3 months ahead of the first rate hike and if bonds will start selling off after Fed, there you have your first sign of what stand ahead of us. For sure there will be interesting times as the broad based dollar strength across the board will be the trigger for the next major crisis. But like anything else timing is the key!!!

Best Regards,
Daytrader21
Traduzir para Inglês Mostrar original