Post
A brief summary of the situation.
Interest rates remain unchanged at 4.25%-4.5%.
The Fed still considers the US economy stable because the recent decline in CPI and PPI is a positive signal alongside the unemployment rate at 4.2%, which is still acceptable. There are some concerns about Trump's tariffs.
Just like before, the Fed will extend the duration if inflation persists, which is somewhat negative but can be accepted since the Fed has left the door open with the balance sheet.
- This balance sheet has saved the market just like before when the Fed helped the market recover due to speculators having more optimistic confidence. It's a good opportunity for short-term trading.
- You can understand this balance sheet as having 2 main functions.
1. Injecting money, 2. Withdrawing money from the market.
Currently, the Fed is implementing item 2, but through the Chairman's statement, speculators believe the Fed will soon ease policies when he mentions this balance sheet. Although still withdrawing money from the market, it will not be as aggressive as before and may stop completely in the long run.
Implementation: the Fed may not reinvest in stocks at maturity or sell them off.
The negative aspect is the lack of liquidity in the market. Excess stocks.
The positive aspect is stable cash flow.
You can temporarily understand that the Fed is still withdrawing money but with decreasing signals, which means it is in a negative state but reducing negativity is a good sign 😁
Interest rates remain unchanged at 4.25%-4.5%.
The Fed still considers the US economy stable because the recent decline in CPI and PPI is a positive signal alongside the unemployment rate at 4.2%, which is still acceptable. There are some concerns about Trump's tariffs.
Just like before, the Fed will extend the duration if inflation persists, which is somewhat negative but can be accepted since the Fed has left the door open with the balance sheet.
- This balance sheet has saved the market just like before when the Fed helped the market recover due to speculators having more optimistic confidence. It's a good opportunity for short-term trading.
- You can understand this balance sheet as having 2 main functions.
1. Injecting money, 2. Withdrawing money from the market.
Currently, the Fed is implementing item 2, but through the Chairman's statement, speculators believe the Fed will soon ease policies when he mentions this balance sheet. Although still withdrawing money from the market, it will not be as aggressive as before and may stop completely in the long run.
Implementation: the Fed may not reinvest in stocks at maturity or sell them off.
The negative aspect is the lack of liquidity in the market. Excess stocks.
The positive aspect is stable cash flow.
You can temporarily understand that the Fed is still withdrawing money but with decreasing signals, which means it is in a negative state but reducing negativity is a good sign 😁