empty
 
 

24.01.202207:11 Forex Analysis & Reviews: Situation in US stock market may exacerbate due to Fed's upcoming meeting this week

Exchange Rates 24.01.2022 analysis

The US stock market was bearish last Friday. The NASDAQ lost 287 points, the S&P 500 tumbled by 63 points, and the Dow Jones plummeted by 329 points. The plunge came due to the hawkish stance adopted by the US Federal Reserve this year. No wonder, the US stock market started to react to policy tightening. At the same time, the regulator has not finished the winddown of asset purchases yet. It just reduced the QE program by $45 billion a month. This means that the US central bank will continue to pump up cash into the American economy. For that reason, market participants showed no reaction to the Federal Reserve's actions. At the same time, they have already acknowledged the fact that this is going to be a tough year for the economy. That is why stock indices have been bearish since the beginning of the new year. Moreover, a prolonged correction could emerge.

The first 2022 policy meeting of the Federal Reserve is likely to become the crucial event of the month. Market participants are sure that the regulator will cut the QE program by another $30 billion and abandon it entirely in March. This factor could be enough to push stock indices further down. Notably, a plunge could be similar to January's. Above all else, the central bank is likely to raise interest rates as early as March. Nevertheless, the adage "Buy the rumor, sell the fact" is now working. All we can do is suggest a possible fall in the US stock market this year. Speaking of the Fed's policy meeting. The market will focus not only on the rate decision but also on Chair Powell's comments. Today, only several investors doubt that there are going to be at least 3-4 rate hikes. At the same time, Mr. Powell has just hinted at the first rate hike but has never spoken about it openly. In fact, unlike his colleagues, he takes up a rather cautious stance every time he speaks. So, Powell's hawkish comments could trigger a sell-off in the stock market. Likewise, Bitcoin and other cryptocurrencies have recently been bearish. Indeed, risk assets are at the highest risk when it comes to policy tightening. For that reason, cryptos are falling in January.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Paolo Greco,
الخبير التحليلي لدى شركة إنستافوركس
© 2007-2022
Benefit from analysts’ recommendations right now
Top up trading account
Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




  • تداول بحكمة، اربح جهازا
    قم بتعبئة حسابك بمبلغ لا يقل عن 500 دولار ، واشترك في المسابقة ، واحصل على فرصة للفوز بأجهزة الجوال.
    انضم إلى المسابقة
  • فيراري من إنستافوركس
    قم بتعبئة حسابك بمبلغ لا يقل عن 1000 دولار
    انضم إلى المسابقة واربح فيراري
    إف8 تريبوتو
    انضم إلى المسابقة
  • إيداع الحظ
    قم بإيداع مبلغ 3000 دولار في حسابك واربح 1000 دولار
    انضم إلى المسابقة
  • بونص 100٪
    فرصتك الفريدة للحصول على بونص 100٪ على إيداعك
    احصل على بونص
  • بونص 55٪
    تقدم بطلب للحصول على بونص 55٪ على كل إيداع
    احصل على بونص
  • بونص 30٪
    احصل على بونص 30٪ في كل مرة تقوم فيها بتعبئة حسابك
    احصل على بونص
لا تستطيع التحدث الآن؟
اطرح سؤالك في الدردشة.