Bitget CFD Chief Analyst: Fed's Hawkish Signals Intensify, Pressuring US Stocks and Strengthening the Dollar
Foresight News reports that Bitget CFD's Chief Analyst, Lewis Huang, analyzed the latest Fed interest rate decision and market trends. He pointed out that although the Fed kept rates unchanged, three dissenting votes supporting a rate hike suggest growing hawkish sentiment within the committee. Combined with sticky inflation and geopolitical risks, the market's expectation for a 25 basis-point rate hike in September has risen to 72%, pushing up U.S. Treasury yields and further weighing on U.S. equity valuations.
Combining technical charts with practical trading strategies, Lewis Huang stated that as rate hike expectations strengthen, tech stocks and the broader market face significant valuation pressures, with the Nasdaq and S&P 500 indices showing clear bearish signals. On the other hand, supported by the hawkish stance, the U.S. dollar index is likely to remain strong, while crude oil shows resilience due to geopolitical factors. He advises CFD traders to align with the current "tightening expectations" macro theme, closely follow the upcoming Jackson Hole annual meeting guidance, and flexibly seize bi-directional swing trading opportunities, such as shorting stock indices at highs and going long on the U.S. dollar in forex trading.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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Deutsche Bank: After the three major central banks hiked rates simultaneously, the market may once again underestimate the terminal interest rate
Deutsche Bank points out that as central banks in the US, Europe, and Japan are tightening policy simultaneously, the market may still be underpricing the eventual terminal rates. With oil prices remaining high, inflation may spill over into core inflation and wages. Moreover, financial conditions have not tightened in tandem, which could weaken the effect of rate hikes. Citing the experience of 2022, Deutsche Bank notes that the market then expected a total of around 200 basis points of Fed rate hikes in the first year, but the final figure exceeded 400 basis points, illustrating that the market often underestimates the terminal rate.
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