Wall Street Seems OK With Three Rate Hikes

  • US30
    (${instrument.percentChange}%)

US30 -H4

The US central bank decided to speed up the tapering of its asset purchase program (QE), bringing QE's expected conclusion forward, to the first quarter of 2022.

More to it, all bank official's now see interest rates higher in the next year, from current 0-0.25%, with the median projection standing at 0.9% - indicating three hikes in 2022.

This marks an aggressive upgrade from the previous forecasts in September, when only half of them (9 vs 9), saw rates higher and the median then being 0.3%.

Stock markets however were not spooked by the Fed's hawkish pivot, as the event did not produce anything outside the realm of expectations.

US30 closed Wednesday higher and today it extends its gains. So do the broader SPX500 and the rate-sensitive NAS100. In fact, big-tech had a blast, with Amazon (AMZN.us), Apple (AAPL.us) and Facebook-Meta (FB.us) for instance, posting gains of more than 2%.

The banking sector did not fare that well though, with JPM losing around 1% and the US Banks Basket also closing the day lower. Higher rates environment is generally seen as good for banks, but the Fed's tightening path has flattened the yield curve, as median interest rate projections stayed at 2.5% for the longer run.

Trade the News: View our Economic Calendar

Back to the US30, after a shallow correction it extends gains today and retakes 36,000, which brings November's record highs (36,570) in its crosshairs. From a purely technical prospective the move looks overextended and that could create downward pressure. The downside however have many areas that can contain bears, with the first key one located at 35,520-387.

We will need to see if the good mood will carry on when NA traders reenter the market, but above EMA200, bulls are in the driver's seat.


Past Performance: Past Performance is not an indicator of future results.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}