Recession close

Recession close

First of all, a few words about the storm on the global financial markets and what, in fact, should be expected further.

Speeches by members of the FRS. This reminds me of the saying that the devil is in the details.

Chicago Fed Chairman Charles Evans decided to stand out from his fellow “hawks” by stating the need to maintain a contractionary monetary policy. According to his forecasts, by the beginning of 2023, the rate level may slightly exceed 4.5%.

This is the news I’ve been waiting for a long time. That is why I am very, very slowly adding Direxion Daily 20+ Year Treasury Bull 3X Shares (TMF) to my portfolio. When the Fed moves from thinking to action (that is, the tightening of policy is completed), this tool can add very seriously – it will be able to show a real rally. But it’s very hard to guess. But I’m sure it will. Necessarily. And, according to my estimates, this will happen before the end of this year.

Fed Vice Chairman Lael Brainard made a similar statement: to fight inflation, the regulator will not rush to ease policy. At the same time, Ms. Brainard admitted that the reduction in the Fed’s balance sheet reduces the level of liquidity in the market, and in the event of a panic, the markets may not do well.

All these thoughts are only my cautious assumptions. This is not an investment recommendation. Life today is extremely unpredictable, and any turns in it are possible.

Publication author InvestStage

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