Head I Win, Tail I Don’t Lose

The Fed is in a dilemma, having been stuck between a rock and a hard place whether to continue hiking interest rate to rein in a sticky inflation that has proven to be stubborn, or take a pause in view of the recent bank runs and failures.

Before the collapse of Silicon Valley Bank, the market has largely been pricing in a 50 basis points hike when the FOMC concludes its monetary policy review today. Now the market is expecting a lift by not more than 25 basis, so as not to inflict more strain on the US and even global banking system and avoid contagious effects.

Whichever is the outcome, I plan to stay invested in our local banking trio $DBS GROUP HOLDINGS LTD(D05.SI)$ , $OVERSEA-CHINESE BANKING CORP(O39.SI)$  and $UNITED OVERSEAS BANK LIMITED(U11.SI)$ . If the Fed follows the ECB to hike another 50 basis points, and the market runs into a depression, I stand ready to acquire more of the bank shares on weakness.

If the market is up, I’ll be happy to sit on my paper gains.

If the market is flat, I’ll be glad to collect the sizeable dividends while I await market recovery over time, as I’m confident that our banks, which are fundamentally strong with robust balance sheets and sound risk management practices, will be able to weather the downturn and emerge stronger in the long run.

@MillionaireTiger @TigerStars @TigerWire @Daily_Discussion @CaptainTiger