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RE: Inflation & Interest rates...

in Project HOPE2 years ago

Dear @qsyal

I haven't been here for a while and I'm glad to see that you're still around. Still publishing interesting and engaging content.

You guys have no doubt seen the very recent news about the FED's decision to hike interest rates as a bitter measure to curb inflation.

It came to me as a surprise to see, that markets rallied and pumped after FED announcement. It's like most investors expected that bad news coming from FED will be even worse. And markets pumped in relief that it's not as bad as it could be.
That's at least how it does seem to look like a bit.

While talking about definiation of inflation: did you hear people calling inflation to be a "hidden tax"? I surely see it that way.

The big elephant in the room though is no other than the US Dollar...

I would expect that USD will maintain its position as long as transactions for oil will be conducted in USD. Which is forcing all countries to use USD as a reserve currency.
Also it's worth to mention, that entire world in in debt in ... USD. So demand for that currency will probably continue for many years ahead of us.

Yours, Piotr

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Welcome back @crypto.piotr, it is nice and encouraging to see you active again :)

It came to me as a surprise to see, that markets rallied and pumped after FED announcement. It's like most investors expected that bad news coming from FED will be even worse. And markets pumped in relief that it's not as bad as it could be.

It was a surprise to me as well. How could a piece of bearish news trigger a bullish wave?!! If anything, this also reflect how pessimistic investors were about the FED and its decisions...

Thanks for reading and have a good day :)

 2 years ago 

The only explanation I could have is that "market" expected even higher raise of interest rates. Many people seemed to expect 1.0 point increase . Instead we ended up on 0.75

perhaps that's the reason