THE FED JUST BAILED OUT THE STOCK MARKET
Published: 2023-02-01
Status:
Available
|
Analyzed
Published: 2023-02-01
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Some Federal Reserve officials anticipate an earlier end to rate hikes, with potential rate cuts to follow.
"some fed officials believe that the pause could come a lot sooner than expected with rates eventually being lowered"
Pending
Other Federal Reserve officials foresee potential significant negative consequences if rate hikes are not sustained for a longer period.
"others believe that this is only the very beginning with the possibility for some serious damage If the Fed doesn't continue raising interest rates longer than expected"
Pending
The Federal Reserve is expected to issue warnings regarding its policy decisions in the coming months.
"the Federal Reserve's warnings over these next few months"
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Current economic conditions may signal a new, unprecedented trajectory for the economy compared to the past year.
"this could very well be setting a brand new trajectory that we haven't seen for more than a year"
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Inflation is showing a downward trend attributed to weak retail sales.
"inflation is falling on weak retail sales"
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Companies are starting to reduce their workforce size.
"companies are beginning to downsize their Workforce"
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In 2023, positive economic news will be perceived negatively, while negative news will be viewed favorably.
"in 2023 good news is bad but bad news is good"
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Consumer spending decreased by 0.2% month-over-month in the latest report.
"the most recent consumer spending report showed a decline of 0.2 percent month over month"
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Luxury home sales (>$5 million) in areas like San Francisco have dropped by 70% over the past year.
"in areas like San Francisco luxury home sales about five million dollars have already declined 70 in the last year"
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Homes are taking longer to sell compared to previous periods.
"all homes are sitting on the market longer than they used to"
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Total housing inventory has dropped below 1 million units, and its growth rate has decreased from its peak.
"total housing inventory once again fell under 1 million units with growth slowing down from the last year's Peak"
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The month-over-month decline in housing prices is the largest observed since 2011.
"we saw the biggest month-over-month housing decline since 2011"
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Minneapolis experienced the largest housing market decline, followed closely by Oklahoma City, Phoenix, and Houston.
"Minneapolis takes first place with Oklahoma City Phoenix and Houston coming up close behind"
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The Pending Home Sales Index is identified as a key leading indicator for market direction.
"the pending home sale index which is probably one of the best leading indicators to look at in terms of which direction the market is headed"
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Housing activity saw a 2.5% increase in December, recovering from record lows in the previous month.
"we did see a slight increase of two and a half percent in December coming off the record lows for the month prior"
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The reopening of China's economy is anticipated to alleviate supply chain issues, increase demand, and boost international trade.
"there's also the hope that China's reopening economy will help ease supply chain constraints drive more demand and Boost International Trade"
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China's economic growth could lead to higher inflation due to increased demand for oil, materials, and goods.
"others say that even though China might drive excess growth it can also lead to higher inflation is their need for oil materials and goods and creases"
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Inflation is currently easing but is expected to face increased pressure in the third quarter.
"I see inflation relaxation right now but we will see more pressure on inflation in Q3"
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Historically, inflation tends to spike, temporarily subside, and then re-emerge.
"in the past inflation appears in spikes it resolves Fool's people and then comes back"
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Inflation typically recedes, leading to increased consumer spending, before reappearing and persisting for up to ten years.
"inflation generally subsides people celebrate by spending more money and then it reappears for as long as a decade"
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Post-World War II data suggests inflation normalization takes several years, not just a few months.
"in almost every single case inflation took several years to normalize from the peak and it's never flatlined within just a few months"
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The S&P 500 is projected by analysts to finish the year above 4,000, with a potential range between 3,500 and 4,500.
"the average analyst expects the S P 500 to end the year above 4 000 with the range anywhere from 3 500 to 4 500"
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The market anticipates one additional 25 basis point rate hike on March 22nd, followed by a pause in further increases.
"80 percent of Traders are pricing in one more 25 basis point rate hike in their March 22nd meeting and then a pause"
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Despite easing inflation, the Federal Reserve will be cautious about declaring a peak in interest rates due to a strong job market.
"U.S inflation shows price pressures are easing yet in an environment of a strong jobs Market the Federal Reserve will be weary of calling the top in interest rates"
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The Federal Reserve is unlikely to provide advance indications of future policy moves.
"the Federal Reserve is not going to give us any indication on what's going to happen too far in advance"
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A peak federal funds rate between 4.75% and 5% is currently factored into market expectations.
"a peak federal funds rate of 4.75 to 5 percent is being priced in"
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Consumer expectations for inflation over the next year have decreased to 3.9%, the lowest point since April 2021.
"consumer expectations for near-term inflation did fall to the lowest level since April of 2021 at 3.9 percent for the next year"
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Employment levels have largely recovered to pre-pandemic figures, and wage growth has normalized, indicating it's no longer a primary driver of price increases.
"employment is mostly recovered to where it was prior to the pandemic and wage growth is all but returned to normal suggesting that it's no longer a driver of higher prices"
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The Federal Reserve might need to implement further interest rate hikes if demand increases.
"the FED may have to increase interest rates a little bit more due to higher demand"
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Investors are increasingly opting for money market accounts yielding over 4% due to their low-risk profile compared to stocks and real estate.
"plenty of investors are beginning to use cash as an investment within money market accounts because it's currently paying over four percent and that is relatively risk-free when you compare it with stocks or real estate"
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The current trend suggests the end of the interest rate hike cycle may be approaching.
"we could very well be headed towards the end of the rate hike cycle"
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Both the Bank of England and the Bank of Canada are anticipated to reduce their rate hike activities in the coming months.
"as both England and Canada are expected to scale back over these next few months"
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Predictions are sought regarding economic developments throughout the remainder of 2023.
"what you think will happen throughout the rest of 2023"
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