Economy 52,844 Posted January 12, 2022 Share Posted January 12, 2022 https://www.bnnbloomberg.ca/u-s-inflation-hits-39-year-high-of-7-sets-stage-for-fed-hike-1.1706478 US inflation for the whole of 2021 ended at 7% by far the highest in decades Markets are now pricing in the expectation that the Fed will indeed start raising interest rates in March to fight inflation Link to post Share on other sites More sharing options...
Concertaholic 6,578 Posted January 12, 2022 Share Posted January 12, 2022 9 minutes ago, Economy said: Markets are now pricing in the expectation that the Fed will indeed start raising interest rates in March to fight inflation What does it mean that “markets are now pricing”? Link to post Share on other sites More sharing options...
Lucas 31,102 Posted January 12, 2022 Share Posted January 12, 2022 Is it why USD is falling in fx trading lost 100 euros today bcs of this fk Link to post Share on other sites More sharing options...
Economy 52,844 Posted January 12, 2022 Author Share Posted January 12, 2022 8 hours ago, Concertaholic said: What does it mean that “markets are now pricing”? The rates and yields bonds are trading for basically especially in the government treasury markets Basically when the Fed (Central Bank) changes rates it influences the rates in the entire financial market in general even private lending markets... But if investors expect a rate hike coming, they start to price that in by not accepting to buy bonds below a certain interest rate in expectation that its going up. Because why sign up for a lower paying investment now if waiting just a little longer u can by the same investment for more returns? So even though the fed didnt announce the rate hikes yet interest rates in the markets are already rising on their on purely on the expectation of it So when investors expect a certain outcome to happen they tend to make the market start to price in that outcome before it actually occurs It happens in stocks as well. For example if there is wide expectations that a companies profits went up a lot, the stock will start to rise before the numbers are even officially released as investors (and speculators too) wanna get on it On consequence of this is that often by the time the event actually occurs movement is not drastic because its only a cofirmation of what was already expected anyway Link to post Share on other sites More sharing options...
pachinko 10,753 Posted January 12, 2022 Share Posted January 12, 2022 8 hours ago, Economy said: https://www.bnnbloomberg.ca/u-s-inflation-hits-39-year-high-of-7-sets-stage-for-fed-hike-1.1706478 US inflation for the whole of 2021 ended at 7% by far the highest in decades Markets are now pricing in the expectation that the Fed will indeed start raising interest rates in March to fight inflation What does raising interest rates mean? Link to post Share on other sites More sharing options...
Economy 52,844 Posted January 12, 2022 Author Share Posted January 12, 2022 5 hours ago, Lucas said: Is it why USD is falling in fx trading lost 100 euros today bcs of this fk Must be another reason(s) Higher interest rates tend to boost a currency not drop it Maybe Europe is starting to drop hints on rate hikes too which is less expected than the US so perhaps that raised demand for Euro more than the Dollar But then again it could be totally unrelated factors. I follow the markets but i dont follow every single speculative trend and the why of it in every Country/Currency all the time . Link to post Share on other sites More sharing options...
Economy 52,844 Posted January 12, 2022 Author Share Posted January 12, 2022 1 minute ago, pachinko said: What does raising interest rates mean? It raises the rates it charges to private banks which in turn riples thru the entire lending economy including even Government bonds Link to post Share on other sites More sharing options...
pachinko 10,753 Posted January 12, 2022 Share Posted January 12, 2022 5 minutes ago, Economy said: It raises the rates it charges to private banks which in turn riples thru the entire lending economy including even Government bonds What is the impact to me? A citizen? Link to post Share on other sites More sharing options...
RAMROD 117,011 Posted January 12, 2022 Share Posted January 12, 2022 5 hours ago, Lucas said: Is it why USD is falling in fx trading lost 100 euros today bcs of this fk That stiffs fluctuates by minutes. If anything it would affecting other currencies more as it will be more expensive to buy dollars now As time of typing, I am checking it goes €873 per $1000 to €875 in 1 minute. (ﾉ◕ヮ◕)ﾉ✧*:･ﾟ ᶠʳᵒⁿᵗ ᵗᵒʷᵃʳᵈ ᵉⁿᵉᵐʸ (*´艸｀*) ♡♡♡ Link to post Share on other sites More sharing options...
Economy 52,844 Posted January 13, 2022 Author Share Posted January 13, 2022 54 minutes ago, pachinko said: What is the impact to me? A citizen? Lower inflation (in the medium to long term) but higher loan costs if u say borrow a car or a mortgage Housing is one major thing affected by this because it involves such large loans Higher rates reduce prices (or at least reduce the rate of increase) by reducing how much people can bid up a home price but ull pay more in interest Link to post Share on other sites More sharing options...
TimisaMonster 31,073 Posted January 13, 2022 Share Posted January 13, 2022 Yet Americans are still struggling to get a decent minimum wage increase Stream my new single, 💜"Heartbeat"💜, on Spotify! Link to post Share on other sites More sharing options...
Dojo 19,823 Posted January 13, 2022 Share Posted January 13, 2022 it sounds so chaotic! Link to post Share on other sites More sharing options...
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