Fed Meeting(21 Sept): 75bps rate hike, or 100bps?

After hot inflation report & a market crash, how much will the Fed raise rates at its 20-21 Sept meeting eventually? Vote and share your opinions!

  • 75 bps59%

  • 100 bps35%

  • Others6%

User Discussion

avatarOmega88
09-25 22:08
$Sea Ltd(SE)$ Chief executive Forrest Li said in an internal memo sent to staff on Thursday that the leadership team has decided that it will not take any cash compensation "until the company reaches self-sufficiency"."With investors fleeing for 'safe haven' investments, we do not anticipate being able to raise funds in the market," Mr Li said, reiterating that the company's primary objective for the next 12 to 18 months is to achieve positive cash flow as soon as possible. Li has finally realized that the previous approach of burning excessive cash is not working! But better be late than never!The good news is Sea has sufficent cash to sustain itself in short to medium term as it has raised about US$6.3 billion of cash when the share price was at its peak! Based on its cash burn rate of US$1.4 billion last year and more conservative spending in the upcoming quarters, the cash should keep the business running for a while.The once formidable Unicorn stock from SG has seen its share price dropped significantly since Dec 21 and its share price has dropped ~74% YTD!! Notably, Temasek Holdings have added ~ 0.2mil shares to take its total stake in SE to 2.75mil shares, which is worth ~US$170 mil.With more impending interest hikes, it would be good if Sea focus more on their gaming business which is the cash cow instead of expanding their loss-making business (e-commerce and fintech). Go slow and steady.Although I'm not vested in the stock in the short-term, I'll be monitoring its progress closely to see how the company is planning to reduce costs and improve its profitability! As the gaming industry is expected to grow from current US$200 billion to US$400 billion by 2027 and Garena will be a gem in the Esports industry. Do you agree with me? Let me know your thoughts!!@TigerStars @CaptainTiger @MillionaireTiger       
avatarOmega88
09-23 22:26
$Semiconductor Bull 3X Shares(SOXL)$ Ray Dalio Says 4.5% Interest Rate Would Sink Stocks by 20%!!Based on an interest rate of 4.5%, the present value discount effect and an assumed 10% decline in incomes, Dalio estimates these factors combined will create a 20% drop in equity prices on average, with longer-duration assets suffering the worst! Hence, I believe there will be more downside!! Tiger brothers and sisters, brace yourself for more volatility ahead!!@Daily_Discussion  @CaptainTiger  @TigerStars  @MillionaireTiger  

Hawkish Fed: Higher interest rates for a longer time

Here are the key takeaways of US Fed September meeting:Higher interest rates for a longer timeVolcker-esque PowellPutin factorHigher interest rates for a longer timeThe US Fed took an indirect way to shock the market. It stuck to the market expectations of raising interest rate by 75 bps.But what caught the market by surprise is that itraised the dot plot significantly. The key 2023 median dot was raised to 4.625%. This is much higher than the market expectations of 4.1% for the end of next year. Below are the details of the dot plots:2022: 4.375% versus 4.125% expected, 4.23% priced2023: 4.625% versus 4.375% expected, 4.12% priced2024: 3.875% versus ~ 4% expected, 3.47% priced2025: 2.875% versus ~ 3.375% expected, 3.23% pricedLong-run: 2.5% versus 2.50% expectedIn other words, the US Fed is communicating to the markets that interest rates are heading higher and will stay there “for some time.” This is in stark contrast to Fed Chair Powell’s loose monetary policy stance last year when he regarded inflation as ‘transitory’.Volcker-esque PowellPowell also stated that we are taking “forceful and rapid steps” to bring inflation to 2%. He is showing his resolve that he will do whatever it takes to stop inflation. This is similar to the former Fed Chairman Paul Volcker who broke high inflation with punishing rate increases in the early 1980s.In a further similarity to Volcker, Powell appeared to have subtly reference Paul Volcker by quoting his autobiography, “Keeping At It.” Towards the end of his opening statement, he states that the US Fed will “keep at it” in their fight against inflation.This is also nothing new, as Powell gave a speech earlier this month with a subtle reference to Volcker that “we will keep at it” until the fight against inflation is over.Putin factorRussia President Vladimir Putin could possibly have made Powell’s fight against inflation a tougher one.Yesterday, he announced the partial mobilization of the Russian population, including calling military reservists into active service. This is an escalation of the Ukraine conflict and could possibly boost crude oil prices.In the recent August CPI figures, one silver lining is the falling oil prices as gasoline prices fell 10.6% in August, the biggest monthly drop in more than two years. But inflation was still red hot as everything else increased.Now, consumer prices could come down as a possible recession reduce demand for consumer goods and services. But, this could benegated if oil prices shoot back up.Crude oil prices are languishing at $84.1. This is about a 30% drop from the high of $121.7 this year. If crude oil prices rally back to $120 as a result of geopolitical tensions, inflation will continue to be a problem, regardless of how many rate hikes the US Fed makes. This will be a worst-case scenario for Powell.
Hawkish Fed: Higher interest rates for a longer time

Fed raised 0.75% as expected but markets slumped. Why?

The Fed raised the interest rate by 0.75% which was expected but the S&P 500 reversed course and closed down 2% for the day.Shouldn't the market have already priced in this rate hike?Yes, the market has priced in the current rate hike but it has not priced in the future rate hikes.There was a shift in the expected rate hikes after the last Fed meeting. So the market adjusted for the new piece of information.Markets are forward looking.This is where we look at the Fed's dot plot - a chart that records each Fed official's projection for the central bank's key short-term interest rate.In June, the median 2022 year-end projection was 3.4% while for end-2023 was 3.8%.The dot plot released yesterday showed that the expectation has risen. End-2022 projection rose to 4 - 4.5% while end-2023 saw 4.5 - 5% estimates.There's also no easing of interest rate until 2024.A very quick escalation considering only 3 months have passed.While the accuracy of the dot plot is a suspect, it does signal how increasingly hawkish the Fed has become which brings about more recessionary fears to the markets.It doesn't help when the Fed chairman's language was harsher than previous speeches. The term 'soft landing' has been ditched and Powell replaced it with 'some pain'.He said, "higher interest rates, slower growth and a softening labor market are all painful for the public that we serve, but they're not as painful as failing to restore price stability."It is also going to be painful for growth stocks for the next few years too.PS: I will be doing a live webinar on Tiger platform on 27 Sep 2022 - register here https://live.byteoc.com/9999/6253271
Fed raised 0.75% as expected but markets slumped. Why?
avatarShayKC
09-22
 
avatarShayKC
09-22
 
Nailed it!  What about next month? 75bp or 50bp?
avatarSnowkat
09-22
Will there be a bigger bloodbath today? $NASDAQ(.IXIC)$ $DJIA(.DJI)$ View on DJIA(.DJI)BullishBearish[Smug] [Glance] 

Fed deliver 3rd-straight big hike, sees more increases ahead

Federal Reserve officials raised interest rates by 75 basis points for the third consecutive time and forecast they would reach 4.6% in 2023, stepping up their fight to curb inflation that’s persisted near the highest levels since the 1980s.In a statement Wednesday following a two-day meeting in Washington, the Federal Open Market Committee repeated that it “is highly attentive to inflation risks.” The central bank also reiterated it “anticipates that ongoing increases in the target range will be appropriate,” and “is strongly committed to returning inflation to its 2% objective.”Chair Jerome Powell will hold a press conference at 2:30 p.m.The decision, which was unanimous, takes the target range for the benchmark federal funds rate to 3% to 3.25% -- the highest level since before the 2008 financial crisis, and up from near zero at the start of this year.For Bloomberg’s TOPLive blog on the Fed decision and press conference, click hereOfficials expect the benchmark rate to rise to 4.4% by the year end and 4.6% during 2023, according to the median estimate in updated quarterly projections published alongside the statement. That indicates a fourth-straight 75 basis-point hike could be on the table for the next gathering in November, about a week before the midterm elections.Further ahead, rates were seen stepping down to 3.9% in 2024 and 2.9% in 2025.The projections, which showed a steeper rate path than officials laid out in June, underscore the Fed’s resolve to cool inflation despite the risk that surging borrowing costs could tip the US into recession.Before the release, traders expected rates to reach 4.5% in early 2023 before falling about a half point by the end of the year.Powell and his colleagues, slammed for a slow initial response to escalating price pressures, have pivoted aggressively to catch up and are now delivering the most aggressive policy tightening since the Fed under Paul Volcker four decades ago.The updated forecasts also showed unemployment rising to 4.4% by the end of next year and the same at the end of 2024 -- up from 3.9% and 4.1%, respectively, in the June projections.Estimates for economic growth in 2023 were marked down to 1.2% and 1.7% in 2024, reflecting a bigger impact from tighter monetary policy.Inflation peaked at 9.1% in June, as measured by the 12-month change in the US consumer price index. But it’s failed to come down as quickly in recent months as Fed officials had hoped: In August, it was still 8.3%.Job growth, meanwhile, has remained robust and the unemployment rate, at 3.7%, is still below levels most Fed officials consider to be sustainable in the longer run.The failure of the labour market to soften has added to the impetus for a more-aggressive tightening path at the US central bank.Fed action is also taking place against the backdrop of tightening by other central banks to confront price pressures which have spiked around the globe. Collectively, about 90 have raised interest rates this year, and half of them have hiked by at least 75 basis points in one shot.@TigerStars @CaptainTiger @MillionaireTiger 
Fed deliver 3rd-straight big hike, sees more increases ahead
avatarkoolgal
09-22
It's official!  The Feds have spoken and raised the interest rate by 75 basis point.  This is the 3rd straight increase of 0.75% to quell persistently high inflation. Jerome Powell has reiterated his stance from Jackson Hole, " The FOMC is strongly resolved to bring inflation down to 2% and we will keep at it until the job is done."So until the trend of inflation is down, the stock markets will certainly be volatile and the sentiments bearish.The markets reacted negatively today after the announcement and the 3 US Indexes closed down. Investors are now pricing in a peak Feds Fund Rate of 4.6% in 1Q 2023 and recessionary fears are now heightened.In times like this, I am reminded of Warren Buffett's wise saying, "When there is Fear in the market, it is time to be Greedy."I stand ready to bargain hunt quality stocks selling at huge discounts.  Alphabet hit its 1 year low yesterday and today Meta Platforms also went down to its lowest level too.  At 28% drop for Alphabet and 60% drop for Meta Platforms, these stocks are oversold and undervalued.It is time for action!@MillionaireTiger  @TigerStars  @CaptainTiger  
Ok
S&P 500 could fall 10% more if recession comes to fruition, Goldman strategist predictsThe U.S. equity market could experience further losses as rising interest rates, stubbornly high inflation and slower economic growth drive recession fears, Bloomberg reported Wednesday, citing Peter Oppenheimer, Goldman Sachs' chief global equity strategist, in an interview.While the S&P 500 (SP500) has already dropped 21% so far in 2022, Oppenheimer said stocks can decline by an additional ~10% if the economy tips into recession, he told Bloomberg. Equities usually fall 30% during cyclical bear markets, he added.Oppenheimer noted that the top in inflation and interest rates is unlikely to occur before year-end. Earlier, the Federal Reserve hiked its benchmark lending rate by 75 basis points for a third time as the central bank struggles to bring down inflationary pressures. At the same time, the Fed's dot plot showed that the fed funds rate is expected to peak in 2023 before potential cuts in 2024 and beyond.That implies the path for higher rates remains extended, as inflation stays at persistently high levels, thus stock valuations could get knocked lower as financial conditions tighten.Stocks aren't the only asset class getting dragged down. The same is true for bonds, commodities, cryptocurrencies and others. In turn, Oppenheimer contended that cash and short-dated bonds seem attractive now, he pointed out to Bloomberg. The Wells Fargo Investment Institute, meanwhile, predicted that the Treasury yield curve will stay inverted longer than usual and provided a list of its favored bonds picks for investors.
Yes 75 points to 3.25 % Am buying t bills to use the interest to invest partly And also am selling calls of $Alphabet(GOOG)$ To hedge drops I think tomorrow can sell at 16 to$17 
avatarTofuQQ
09-21
75 :)
avatartkltkl
09-21
100bps
The FED isn't the sole reason for markets diving.Remember that the markets are forward looking, while FED's interest rates are lagging indicators.There are several reasons for the market dives. Although there is no need for any reason for rallies orretreats in the stock market.Now, we all witness the massive bounce from mid June to mid August. The markets then dived back close to its critical support area.In my opinion, it's the series of events & news that spooked the markets.Namely: FED Interest Rate Hike, FedEx, CPI Report, Russia Ukraine War, China USA tensions & etc, However, when we take a closer look into history. We can see that everytime the FED raises interest rates, the probability of a positive return after 1 year is 100%.To conclude, the upcoming CPI Report is a critical signal to peak inflation or inflation is still on the rise. I believe it's peaking based on commodities & consumer discretionary prices dropping. 
avatarHH浩
09-21
If Fed follows the consensus which is to raise the point by 75 basis, i think market should have a relief rally tonight and probably till Friday. Come next week, indexes will continue to go down as long as the job reports, Consumers sentiments CPI and core machinery index points to one thing - no sight of inflation to cool below 5%. @话题虎 @Tiger_Comments @小虎活动 @angelchow @Tiger_Earnings @TigerBrokers @MillionaireTiger @rudson 
avatarAlubin
09-21
Banking Fed will go 100bps but less times