World stock markets suppressed eagerness of the fed to raise rates
Yesterday, almost two weeks after the decision of the U.S. Federal reserve to revise the basic discount rate upward, most global investors are beginning to realize that the US stock market began a correction and this correction was about the “neutral rate of the fed”, and what is most remarkable in the financial world were announced the minutes of the meeting of the U.S. Federal reserve, in which market participants found it seems to the obvious negative from the perspective of further growth of quotations on wall Street.
The point is what I wrote last year. And it is this process of raising rates in the US and in parallel with the ongoing process of withdrawal from the financial market of excess liquidity and total reconfiguring of the entire financial system in the United States.
In the minutes of the meeting of the U.S. Federal reserve sounded phrase about the implementation of the so-called ‘restrictive’ monetary policy from the fed towards the U.S. economy and stock market, this means that the fed can still go on the road is extremely unpopular for all the wall Street way. And the road, this is through unexpected for the market rate increase is not familiar to all participants of the market of 0.25 basis points and the rate increase of 0.5 b.p. within the framework of advancing the movement to blow the General financial bubble on wall Street, what I wrote last year, entitled his article with an ironic title “of 0.5 and a salad.”
The essence of my message was that, in too good condition of the economy, members of the fed are already faced with the fact that all processes of withdrawal of excess liquidity and revision of rates upward, have tardy.
We and not only we, the global economic and minds of the whole economic winners of various awards starting in 2015 – 2016 years repeatedly written to obscure the lack of initiative of the U.S. Federal reserve in the field of reviewing the monetary policy in the direction of tightening and at some point they will simply be forced to go to extreme measure is to increase the rate by 0.5 basis points that the market would emotional shock, which can lead to a global reevaluation of values on wall Street, because everything is already accustomed to the “negative value” of money in the system.
Last year I argued that in America not happened the market collapse, it is necessary obviously to understand to the market that the economic realities in the economy, the other is a long time.
Then, last year, the stock market and the fed looked at each other and fed policy the US was partly motivated by the desire and demand of the financial market to be able to live in conditions of loose monetary policy, but now realizing that the economy is strong enough, the fed has all the conditions to opt for the policy having to check the market in your mouth. As has been repeatedly said from different stands, on wall Street, “the tail wagging the dog” and this process is already very long.
The publication of the minutes of the last fed meeting, U.S. speaks openly to the market that it can come with a very unexpected ending.
And it may be a serious end to the growing trend of the past several years, which also contributes to the current foreign policy of the White House with their foreign wars and other sanctions for all and for any reason.
So, as I wrote this week, the ambush is already closer and closer. And that’s why yesterday the us stock market yesterday fell again. I wonder what will happen next week.
Head of analytical Department,
“International financial center”