LimLS
2022-07-14

What is the chance of Fed doing a 100bps and its effect? Last month, the guidance from Fed for July hike is 50-75. But we know that Fed guidance is not worth anything. How many times had Fed guidance changed during the last minute? June 75bs hike will be a good example for last minute change to 75bps hike just because of May high CPI. Now there is 2 weeks before 26-27 July FOMC. More than enough time for Fed to drop hints. Bostic from Fed had start the ball rolling by saying it's on the table. In my opinion, 100bps can be very possible. But what's the implications? 2Y/10Y yield curve was inverted since last week and start to widen even more with the 2Y yield spiking up today due to market expectations of 100 bps hike. We know prolonged inverted yield of higher magnitude often point to incoming recession. More and more data points are signalling an incoming recession. So buckle up and brace for recession. Hopefully it's a mild one.

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Comments

  • YiCheng0301
    2022-07-14
    YiCheng0301
    FED will increase 100 bps so they have enough room to play with during Aug and Sept
  • Cheahkim
    2022-07-14
    Cheahkim
  • ngchris
    2022-07-14
    ngchris
    nothing is impossible
  • zolluA
    2022-07-14
    zolluA
    very high chance tbh
  • ZachLoh
    2022-07-14
    ZachLoh
    Noicd
  • ehkay
    2022-07-14
    ehkay
    [Miser]
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