Tonight, most likely the US Fed will raise the interest rates by further 25 basis points to tame the inflation & bring it to 2% target rate.
This will most likely be the last rate hike by the US Fed in this rate hikes cycle & I personally don’t see further uptick in interest rates.
Also, this would take interest rates in USA at 22 years peak of 5.5%
Anyway, the market is forward looking & if this is the last hike then the markets will start upmoves immediately after the announcement in a preemptive move on rate cuts expectations.
Anyway, this rate hike & cut is all noise for long term investors.
Next year, everyone would have forgotten this mayhem just like they forgot the Russia Ukraine War & Covid lock downs.
1-2 years down the line, high interest rates too would be a thing of the past.
On a closing note, I expect interest rate cuts sooner (Maybe we can see one by December 2023 itself). As & when interest rate cuts, the money printing will start in full fledge. The money from bond markets will move to equity markets. The stock market across the world are going to be flooded with ample liquidity in next 2-3 years, that anyone who’s holding stocks is going to get benefited as stocks rise.
The question of rate cuts is not if, but when?
Till then, we’ll continue holding on to our equity investments with patience. Your eyes will pop out when you’ll see your bumper money making portfolio gains 2-3 years down the line.
We’re just getting started with this bull run.
