The Effect of the Latest Fed Decision on Stocks Discussed by Two Market Observers

by | May 9, 2023 | Invest During Inflation | 17 comments

The Effect of the Latest Fed Decision on Stocks Discussed by Two Market Observers




Degas Wright, Decatur Capital CEO and CIO, and Alan McKnight, Regions Asset Management CIO, discuss the Fed, inflation, and the markets. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

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On Wednesday, the Federal Reserve announced its decision to raise interest rates for the second time in 2018, as the U.S. economy has continued to show signs of strength. Two market watchers have weighed in on what this decision could mean for stocks in the coming months.

According to Danielle Shay, director of options at Simpler Trading, the rate hike was largely expected by the market and is not likely to have a major impact on stocks. “Normally, rate hikes are negative for stocks, but this time around, we saw a muted reaction,” she told CNBC. However, Shay noted that investors should still be alert for potential market fluctuations, as the Fed has signaled plans for two more rate hikes in 2018.

Meanwhile, Kristina Hooper, chief global market strategist at Invesco, believes that the Fed’s latest decision could lead to increased volatility in the market. “In the short term, I do think there will be some choppiness in markets,” she told CNBC. Hooper pointed to the recent sell-off in technology stocks as an example of the potential for sharp market movements in light of economic news.

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Hooper also noted that the Fed’s decision to raise rates reflects confidence in the U.S. economy, but cautioned that investors should keep an eye on global economic trends as well. “While we do see strength in the U.S. economy, we are also seeing growth abroad slow down a bit,” she said. “I think it’s going to be really important for investors to keep their eyes on international growth and on things like trade tensions.”

Overall, while the Fed’s decision may not have an immediate negative impact on stocks, it is clear that investors should be attentive and cautious in light of potential future rate hikes and global economic fluctuations.

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17 Comments

  1. Lemarie Cooper

    According to Bipan Rai, North America director of FX strategy at CIBC Capital Markets, "there is growing concern that incoming data is showing that the Fed may be slightly behind the curve than perhaps they expected heading into this year." More red than green is seen in my portfolio. How are other people in this market making over $350,000 in gains in a short period of time?

  2. Greggs T. Bedard

    Things aren’t looking good stock market, banking system and transportation industry … I'm wondering if people who went through the financial crisis in 2008 had an easier time than me right now. The stock market is making me really worried because I've lost over $27,000 in just this month and I'm not making as much money as I used to. This is making me concerned that I might not have enough money saved up for my retirement since I can't add to my savings ..

  3. Won Hur

    Is this a good time to buy stocks/crypto in the Europe? I know everyone is saying stocks are at a discount and all, but just how long will It take for us to recover, obviously there are strategies to manoeuvre in this present market but these strategies doesn't come common to the average folk, or am I better off putting my money elsewhere.

  4. Parrish

    A lot of folks have been going on about this year rally and said stocks that would be experiencing significant growth this season, any idea which stocks this may be?

  5. Elizabeth Jones

    I am new to the stock market. Every stock that I bought so far, I was out of luck because I bought them when they were expensive. I feel I missed out on all the stock opportunities so far for the tech stocks. l believe having 75K yearly income would be a good investment so I want to plug all my savings into the stock market. I know this sounds a bit dull but I would like to know if I should learn investing or let somebody else (more capable like a Fin-Advisor) do it for me? Please share your thoughts. I am kind of tired of searching for a good stock to buy and losing all the good opportunities

  6. Arnold Brown

    I lost a huge chunk of my portfolio while holding some coin last year,i also tried trading myself same losses. Pls are there any way I could make profits from the cryptomarket? I'm sick of holding..

  7. Yuliana Gandara

    Awesome video! I was blown away by the recent economic data! There seems to be uncertainty over inflation and the U.S. stock market is at a crucial crossroads. Despite growing concerns among investors, the economy shows signs of resilience which could help Bitcoin remain stable. Interestingly, the crypto market, which is usually correlated with the U.S. stock market, has been moving in the opposite direction. BTC and the Nasdaq are currently bouncing back. However, with the sentiment changing fast now is the perfect time to get into the crypto market. excellent trading strategy has helped me amass 32 btc in the three weeks that I've been trading. In this field, she is a true visionary..

  8. John Dingle

    Market gonna react differently than most think.

  9. John Dingle

    If Fed pauses. Means slowdown is very near and growth is gone. Stocks will go up on hike. And fall on pause.

  10. Walter P

    Useless info for retail investor.

  11. James fred

    First understanding the financial market and how it works then you need to know how to study the market charts. Thanks to Randy Douglas for showing me the appropriate way to get into bitcoin, investing and trading with his trade signal and investing guidelines. Investing and trading are more than just having TA skills. There is a big component of discipline and emotional maturity, that one has to work on! Time in the market vs. timing the market. If you keep that mentality as an investor, you will stay calm during the storm! Within some months I was making a lot more money and have continued on that same path with Randy Douglas trading signals….

  12. Jawad Arif

    The market already priced in the .25% so we won't see a mini rally

  13. rolback

    But Biden’s team of liars said banks are stable. Why are banking stocks tanking?

  14. petermerelis

    reducing exposure to regional banks *now*… brilliant!

  15. McGinn Navraj

    I'm really worried about the current bank crisis. If a bank as big as SVB could fail, I fear for a lot more. I know a friend who is running a high-growth startup, and was badly hit by the bank run. I have pulled out more than $340k from my bank. After all, the FDIC covers only up to$250,000, and the implosion could have bad effect. Looking to invest into the stock market now. Does anyone know how I could go about it?

  16. Mohit C

    The inflation is high because oil companies are not reducing the gas prices even though crude oil prices have decreased in last several months. High gas prices result in higher transportation costs for the goods. Many other companies are also not reducing the prices even after decrease in raw material prices. This is greedflation and ordinary people are suffering.

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