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Opinion

The FED plays a dangerous game

Markets have been wholloped in the last few weeks as investors braced for any optimism from the central bank. 

Currently, the FED is playing a dangerous game with their most recent rate hike. Trying to make moves to get inflation under control to bring a glimmer of hope back into the eyes of investors and economists.

With the devil in the details – the accelerating interest rates aren’t going anywhere. When will stability be brought back to our markets?

Coming to terms with hurtful truths, the FED is aware it can’t control the storm that the energy crisis is brewing, even with Jerome Powell announcing it as the main factor driving inflation while also mentioning that the war in Ukraine isn’t helping very much. 

The idea is that the quicker and higher interest rates rise, the quicker demand drops for oil and prices come back down. This is what it will take for central banks to reverse course on interest rates and get things under control.

What are the odds for a recession? That is the question that has been keeping investors on their toes. If we continue to see weak US economic data and continued rate hikes towards the expected 3.4% by the end of the year – then it won’t be surprising to see huge volatility and market swings in the short term. 

Front and center; what stocks will fair the best? Who will come out on top? What will hedge you against the current market conditions? All of this and more is discussed in the latest EFG podcast, click below to watch.

Emerald Financial

Emerald Financial is a financial services firm founded in 2005. We offer a diversified range of services, including; stock research and data, education courses, portfolio services, and financial news. Over the years, we have educated thousands of Australians to trade equities and derivative markets.

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