Thread by @KirtanShahCFP

Fed raised rates by 75 bps & yet the US markets rallied between 1.4% to 4%? A small 🧵

Do ‘re-tweet’ & help us educate more fellow investors

#investing #stockmarkets (1/5)

75 bps was broadly expected & hence priced in by the markets & there was no surprise here, which was a positive. But along with this, it was more about what Fed guided on ‘neutral interest rates’, which led the rally. (2/5)

Powel said, we are now broadly in line with our estimates of neutral rates & going forward, we are now going to be data dependent. What does that even mean you may ask? (3/5)

Neutral rate means the existing rates r neither fueling the economy by being very low nor r they restricting the growth by being very high. So if they r nt fueling, fed is almost there in terms of their hiking cycle & if growth hampers which it is, they will go slow from now on.

This probably means that the aggressive rate hiking cycle will most likely come to an end and we might see a 50 bps hike in Sep and not a 75 bps, which the market is taking as a positive (End)

P.S. - Time to start lapping onto growth stocks & duration? a thread on it soon :)