Game Plan after Fed Hike?
So finally the Fed decided to do a measly 0.25% rate hike today. We all know their plan will do absolutely nothing to curb inflation, which even if you believe the CP lie is running at 7-8%. In reality, it's more like 15-16%. Anyways, while the rate hikes are far too low to do anything to curb inflation, they could bring a significant pull back in the stock market. 2018 showed this.
The market peaked after rates going from 0-2% and then tanked in late 2018 early 2019 after getting to 2.5%. It only reversed course because the Fed stopped committing to the hikes and said it would reverse course. Given how much more overleveraged the economy is today, would it make sense to start selling stocks once rates get to 0.75%-1%? The certainty the market has now based on history usually presumes that we will still rally for the first couple hikes in the cycle.
I do believe that the Fed will reverse course again, but do you guys think it makes sense to sell stocks at some point later this year? Probably after the 3rd or 4th rate hike. Then wait until we see the Fed cave to buy back in. Curious to hear people's thoughts. I feel like all stocks would be affected, even the value ones.
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"Given how much more overleveraged the economy is today, would it make sense to start selling stocks once rates get to 0.75%-1%?"
No, unless you immediately need money for retirement, what would make sense is to keep your core position of stocks and buy more aggressively if the market sells off as the FED continues to hikes.
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