To The Moon

I think the Federal Reserve released the minutes of the December FOMC meeting last year. The document showed that the participants generally agreed that a restrictive monetary policy stance needed to be maintained until subsequent data could provide confidence that inflation was falling steadily back to 2%, which itself might take some time. Officials also stressed that since an important way for monetary policy to have an effect is through the financial markets, an "unsupported easing" in the financial markets could complicate the Fed's efforts to maintain price stability.

The Fed staff sees upside risks to the Fed's inflation expectations and downside risks to the economy's expectations, with a possible recession sometime in 2023. The minutes are the most hawkish since May 2022. From the Fed's standpoint, any sign of keeping inflation high for longer would be assured, and the policy rate could be much higher. The terminal rate forecast implies that after the December rate hike, the Fed will have to raise at least 100 basis points to reach its target. Despite some intraday disruptions from the Fed minutes, the three major indexes relied on a late-day recovery to deliver their first closing session of 2023. The S&P 500 closed 0.75% higher, the Nasdaq 0.69% higher and the Dow 0.40% higher. However, Fed policymakers are concerned that the market is too optimistic and that interest rates will reach higher levels than investors expect after future rate hikes.

The minutes show that participants believe that the "unreasonable easing" of the financial environment will make it more difficult for the Fed to keep inflation down, in other words, interest rates may be forced to rise even higher. Many pointed out that Fed officials expect interest rates to be higher than market expectations. Many stressed the risk of both under- and over-tightening. Participants acknowledged a slowdown in inflation in October and November, but agreed that inflation remains unacceptably high. Fed staffers saw upside risks to the Fed's inflation expectations, downside risks to economic expectations, and the possibility of a recession sometime in 2023. And the valuation of the U.S. stock market is already not cheap, in case the dollar weakness continues, there will be a downside risk to the U.S. stock market in the next six months. In addition, the funds will temporarily go to emerging markets to buy risk assets, so that the possibility of the U.S. stock market has been reduced, so this year's U.S. stock market will be influenced by the Federal Reserve hawkish and lead to the three major indices of U.S. stocks to fall sharply.

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@CaptainTiger @TigerStars @MillionaireTiger