Markets are crashing As Fed is raising Rates

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invest2bfree
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Markets are crashing As Fed is raising Rates

Post by invest2bfree »

This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.

https://fred.stlouisfed.org/series/FEDFUNDS

Also Bonds are selling off at the same time Stocks are crashing.

If the Fed Funds rate is going to be 3% then it is going to be 5 more months of the rate increases.

If you look at the Dollar it is going up as we speak without even serious sell off. I cant believe what will happen to the dollar when the markets crash 40%.

https://seekingalpha.com/symbol/UUP

Is there going to be a massive crash ahead?
Last edited by invest2bfree on Fri May 06, 2022 8:49 am, edited 1 time in total.
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Re: Markets are crashing As Fed is raising Rates

Post by AnalogKid22 »

Maybe. A recession certainly seems likely.
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Re: Markets are crashing As Fed is raising Rates

Post by JoMoney »

invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.
...
No it's not, they were raising rates in 2018 as stocks fell... people were calling it a "taper tantrum".
Despite what some people seem to think, it's not the Fed's job to prop up the stock market.
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Re: Markets are crashing As Fed is raising Rates

Post by alex_686 »

Yes. Maybe. Who knows?

There is the famous quip from a economist who claimed to have 14 times corrected call the last 3 recessions.

There are lots of moving pieces. There are lots of up sides and downs to various scenarios. The Fed is getting lots of the press but I don’t think the role is that important.

In closing, pick a asset allocation based on your risk tolerance.
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Re: Markets are crashing As Fed is raising Rates

Post by Normchad »

JoMoney wrote: Thu May 05, 2022 7:21 pm
invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.
...
No it's not, they were raising rates in 2018 as stocks fell... people were calling it a "taper tantrum".
Despite what some people seem to think, it's not the Fed's job to prop up the stock market.
Exactly. Once again, remember, the stock market is not the economy.
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Re: Markets are crashing As Fed is raising Rates

Post by willthrill81 »

invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.

https://fred.stlouisfed.org/series/FEDFUNDS

Also Bonds are selling off at the same time Stocks are crashing.

If the Fed Funds rate is going to be 3% then it is going to be 5 more months of the rate increases.


Is there going to be a massive crash ahead?
There is always the possibility of a massive crash ahead. You'd best choose a strategy that will enable you to deal with it.
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Re: Markets are crashing As Fed is raising Rates

Post by rockstar »

This is how DCF models work. Interest rates go up, the value of the cash flows go down. The offset is better earnings. But we're already seeing the customer pull back on spending. E commerce is getting hammered. So if earnings are slowing down, and if rates are going up, then equities should go down.
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Re: Markets are crashing As Fed is raising Rates

Post by 000 »

invest2bfree wrote: Thu May 05, 2022 7:14 pm Is there going to be a massive crash ahead?
Probably, but the timing is always difficult. Is this the real thing, or is this another tantrum before the real thing?
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Re: Markets are crashing As Fed is raising Rates

Post by invest2bfree »

000 wrote: Thu May 05, 2022 7:34 pm
invest2bfree wrote: Thu May 05, 2022 7:14 pm Is there going to be a massive crash ahead?
Probably, but the timing is always difficult. Is this the real thing, or is this another tantrum before the real thing?
If you look at the Dollar it is going up as we speak without even serious sell off. I cant beleive what will happen to the dollar when the markets crash 40%.

https://seekingalpha.com/symbol/UUP
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Re: Markets are crashing As Fed is raising Rates

Post by 000 »

invest2bfree wrote: Thu May 05, 2022 7:41 pm If you look at the Dollar it is going up as we speak without even serious sell off. I cant beleive what will happen to the dollar when the markets crash 40%.

https://seekingalpha.com/symbol/UUP
See, this is why I am skeptical of the bond bearishness.
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Re: Markets are crashing As Fed is raising Rates

Post by nisiprius »

JoMoney wrote: Thu May 05, 2022 7:21 pm...Despite what some people seem to think, it's not the Fed's job to prop up the stock market...
Indeed. To be clear, the Fed's job is written into law, the so-called "dual" mandate, and it is:
to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.
Nothing in there about the stock market.

It's normal and to be expected that if interest rates rise, [added] other things being equal the market value of both stocks and bonds will fall, and for the same reason. They both represent dollar benefits that will be paid sometime in the future.

When interest rates rise, dollars that will be paid in the future are worth less today than they were. When the interest rate is 1%, $100 today will grow to $101 in a year. So $101 you will get a year from now is worth $100 today. So $100 a year from now is worth about 1% less than $100, or about $99.

If the interest rate rises to 2%, $100 a year from now is only worth about $98 today.

When interest rates rise, promises of future money become worth less today.

Both stocks and bonds represent a hope of future dollar benefits. They are an estimate of present value of future payments. If the future benefits don't change, then a rise in interest rates makes both stocks and bonds worth less today, and their present value falls together.
Last edited by nisiprius on Thu May 05, 2022 8:35 pm, edited 1 time in total.
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Re: Markets are crashing As Fed is raising Rates

Post by stocknoob4111 »

invest2bfree wrote: Thu May 05, 2022 7:14 pm Is there going to be a massive crash ahead?
In my view yes, because in 2018 the Fed started this and the market dropped 20%, now we aren't even there and unlike that episode we now have a situation where the Fed can't reverse course, so they are going to plug through their agenda and leave carnage in both the stock and housing markets... as ugly as it gets.
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Re: Markets are crashing As Fed is raising Rates

Post by rockstar »

invest2bfree wrote: Thu May 05, 2022 7:41 pm
000 wrote: Thu May 05, 2022 7:34 pm
invest2bfree wrote: Thu May 05, 2022 7:14 pm Is there going to be a massive crash ahead?
Probably, but the timing is always difficult. Is this the real thing, or is this another tantrum before the real thing?
If you look at the Dollar it is going up as we speak without even serious sell off. I cant beleive what will happen to the dollar when the markets crash 40%.

https://seekingalpha.com/symbol/UUP
This makes sense. As treasury rates go up, demand for treasury bonds go up and along with it the demand for US dollars. And this is bad for International from a currency perspective.
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Re: Markets are crashing As Fed is raising Rates

Post by rockstar »

nisiprius wrote: Thu May 05, 2022 7:51 pm
JoMoney wrote: Thu May 05, 2022 7:21 pm...Despite what some people seem to think, it's not the Fed's job to prop up the stock market...
Indeed. To be clear, the Fed's job is written into law, the so-called "dual" mandate, and it is:
to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.
Nothing in there about the stock market.

It's normal and to be expected that if interest rates rise, the market value of both stocks and bonds will fall, and for the same reason. They both represent dollar benefits that will be paid sometime in the future.

When interest rates rise, dollars that will be paid in the future are worth less today than they were. When the interest rate is 1%, $100 today will grow to $101 in a year. So $101 you will get a year from now is worth $100 today. So $100 a year from now is worth about 1% less than $100, or about $99.

If the interest rate rises to 2%, $100 a year from now is only worth about $98 today.

When interest rates rise, promises of future money become worth less today.

Both stocks and bonds represent a hope of future dollar benefits. They are an estimate of prevent value of future payments. If the future benefits don't change, then a rise in interest rates makes both stocks and bonds worth less today, and their present value falls together.
However, you if you read Ben's book about his time as chairman, the Fed absolutely monitors markets.
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Re: Markets are crashing As Fed is raising Rates

Post by Kookaburra »

nisiprius wrote: Thu May 05, 2022 7:51 pm To be clear, the Fed's job is written into law, the so-called "dual" mandate, and it is:
to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates
Well, they are failing miserably at one of their dual mandates. Last I checked, 1 out of 2 = 50% = a big fat “F”.
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Re: Markets are crashing As Fed is raising Rates

Post by arcticpineapplecorp. »

invest2bfree wrote: Thu May 05, 2022 7:14 pm Is there going to be a massive crash ahead?
my crystal ball is cloudy.

making predictions is hard, especially about the future.
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Re: Markets are crashing As Fed is raising Rates

Post by Marseille07 »

invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.

https://fred.stlouisfed.org/series/FEDFUNDS

Also Bonds are selling off at the same time Stocks are crashing.

If the Fed Funds rate is going to be 3% then it is going to be 5 more months of the rate increases.


Is there going to be a massive crash ahead?
I don't know about a massive crash, but slow grinding toward a bear market is certainly a possibility at this point.

The markets do not like hikes and we see that in action.
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Re: Markets are crashing As Fed is raising Rates

Post by Seasonal »

nisiprius wrote: Thu May 05, 2022 7:51 pmIt's normal and to be expected that if interest rates rise, the market value of both stocks and bonds will fall, and for the same reason. They both represent dollar benefits that will be paid sometime in the future.
You need to qualify that with "all else being equal". Market reaction also depends on why interest rates rise. For example, a very strong economy may well lead to higher interest rates (bonds fall) and higher stock prices (stronger than expected earnings outweighing interest rate effects). On the other hand, Fed tightening to reduce inflation may well lead to a slower economy, which is not great for stocks. Effects on medium and long rates are less certain. A slower economy and lower inflation could mean lower medium and longer rates, or not. It depends.

It seems like only a few months ago many were complaining about low rates on their bonds. Now many are complaining about bond values falling. Hard to have both high yields and high bond prices.
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Re: Markets are crashing As Fed is raising Rates

Post by Seasonal »

rockstar wrote: Thu May 05, 2022 7:57 pm However, you if you read Ben's book about his time as chairman, the Fed absolutely monitors markets.
Markets can provide valuable clues about the economy. That doesn't mean the Fed regards supporting markets as part of its mission.
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Re: Markets are crashing As Fed is raising Rates

Post by nisiprius »

Seasonal wrote: Thu May 05, 2022 8:20 pm
nisiprius wrote: Thu May 05, 2022 7:51 pmIt's normal and to be expected that if interest rates rise, the market value of both stocks and bonds will fall, and for the same reason. They both represent dollar benefits that will be paid sometime in the future.
You need to qualify that with "all else being equal"...
Done. I'd sort of said that in another place, "If the future benefits don't change."

I'm too lazy to search for it but I feel quite sure there are posts in the past at which people have insisted that stocks and bonds will reliably move in opposite directions, and other people have pointed out that a change in interest rates would tend to make them move in the same direction.
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Re: Markets are crashing As Fed is raising Rates

Post by rockstar »

Seasonal wrote: Thu May 05, 2022 8:26 pm
rockstar wrote: Thu May 05, 2022 7:57 pm However, you if you read Ben's book about his time as chairman, the Fed absolutely monitors markets.
Markets can provide valuable clues about the economy. That doesn't mean the Fed regards supporting markets as part of its mission.
Read his book. Lots of good insights.
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Re: Markets are crashing As Fed is raising Rates

Post by tibbitts »

invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.
About 24hrs ago the Fed was raising rates as the markets were dramatically rising. So you sort of get to pick your narrative.
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Re: Markets are crashing As Fed is raising Rates

Post by AlohaJoe »

JoMoney wrote: Thu May 05, 2022 7:21 pm
invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.
...
No it's not, they were raising rates in 2018 as stocks fell... people were calling it a "taper tantrum".
Despite what some people seem to think, it's not the Fed's job to prop up the stock market.
Pfft...you expect people to remember as far back as 2018 before making wild claims on the Internet? 2018 was like 1,000 years ago, wasn't it??
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Re: Markets are crashing As Fed is raising Rates

Post by zaboomafoozarg »

AlohaJoe wrote: Thu May 05, 2022 9:12 pmPfft...you expect people to remember as far back as 2018 before making wild claims on the Internet? 2018 was like 1,000 years ago, wasn't it??
It is funny how few people on the internet seem to remember 2018, let alone 2008 or 1998.
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Re: Markets are crashing As Fed is raising Rates

Post by DarkMatter731 »

zaboomafoozarg wrote: Thu May 05, 2022 9:34 pm
AlohaJoe wrote: Thu May 05, 2022 9:12 pmPfft...you expect people to remember as far back as 2018 before making wild claims on the Internet? 2018 was like 1,000 years ago, wasn't it??
It is funny how few people on the internet seem to remember 2018, let alone 2008 or 1998.
I... I wasn't alive in 1998.

This is the first time I've personally experienced a high inflation environment. If there's a recession, it will be the first where I'll be affected by it.
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Re: Markets are crashing As Fed is raising Rates

Post by vineviz »

tibbitts wrote: Thu May 05, 2022 8:59 pm
invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.
About 24hrs ago the Fed was raising rates as the markets were dramatically rising. So you sort of get to pick your narrative.
You've got to admit, it's scary watching an index crash on Thursday to levels not seen since Wednesday morning.
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Re: Markets are crashing As Fed is raising Rates

Post by NYCwriter »

arcticpineapplecorp. wrote: Thu May 05, 2022 8:05 pm
invest2bfree wrote: Thu May 05, 2022 7:14 pm Is there going to be a massive crash ahead?
my crystal ball is cloudy.

making predictions is hard, especially about the future.
“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently.”
— John C. Bogle

On the importance of sticking to your plan, no matter what happens:

“The winning formula for success in investing is owning the entire stock market through an index fund, and then doing nothing. Just stay the course.”
— John C. Bogle
......

source: https://financinglife.org/bogle-quotes/
You forgot to mention his prediction in 2018 that the market would return a paltry 3-4% at best....
In general, his advice was great. But he was as much a failure at predicting what the market would do as anyone else.
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Re: Markets are crashing As Fed is raising Rates

Post by NYCwriter »

Recession is a scary word, especially for prime age workers who remember 2008. We've had--what, two major ones out of how many? A dozen or so (or 50 lol) depending on definition. Recessions usually follow periods of hot growth, but they have all been around 8-18 months.

The big hits hurt because they involved broad catastrophic economic conditions.

I can't comment on whether the Fed is doing the right thing. (Nobody thinks the Fed ever does the right thing.)

Covid ended a long period of economic expansion, but it did not end the market growth that most of us benefited from as investors--through the beginning of this year.

Breaking things down, I made a lot of passive profit being invested the last decade, and following basic rules means I am not that worried about the next year, except that it hurts a little to not make bank.

I don't have to worry too much about higher rents or having to pay more for groceries, which is to say I'm privileged, which I think is true of most people on this forum.
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Re: Markets are crashing As Fed is raising Rates

Post by dreambig »

It may not be part of its official mission, but the Fed definitely cares about markets. It would be naive to believe otherwise. That's not to say "the Fed will keep stocks high forever" but read between the lines.
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Re: Markets are crashing As Fed is raising Rates

Post by nisiprius »

Gotta look, gotta look... where the heck did I put my glasses...

Image
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Re: Markets are crashing As Fed is raising Rates

Post by Tom_T »

vineviz wrote: Fri May 06, 2022 1:53 am
tibbitts wrote: Thu May 05, 2022 8:59 pm
invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.
About 24hrs ago the Fed was raising rates as the markets were dramatically rising. So you sort of get to pick your narrative.
You've got to admit, it's scary watching an index crash on Thursday to levels not seen since Wednesday morning.
S&P one week ago: 4,131
S&P right now: 4,126
In between was a roller-coaster ride.
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Re: Markets are crashing As Fed is raising Rates

Post by vineviz »

Tom_T wrote: Fri May 06, 2022 6:55 am S&P one week ago: 4,131
S&P right now: 4,126
In between was a roller-coaster ride.
Only if you look :)
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Re: Markets are crashing As Fed is raising Rates

Post by harvestbook »

NYCwriter wrote: Fri May 06, 2022 1:57 am

You forgot to mention his prediction in 2018 that the market would return a paltry 3-4% at best....
In general, his advice was great. But he was as much a failure at predicting what the market would do as anyone else.
Are you referring to Bogle? I'm not a serious student of the man but all I recall were 10-year estimates in that range up to 5%, never any short-term predictions. He certainly wasn't wildly optimistic, and he's not wrong...yet.
I'm not smart enough to know, and I can't afford to guess.
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Re: Markets are crashing As Fed is raising Rates

Post by invest2bfree »

JoMoney wrote: Thu May 05, 2022 7:21 pm
invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.
...
No it's not, they were raising rates in 2018 as stocks fell... people were calling it a "taper tantrum".
Despite what some people seem to think, it's not the Fed's job to prop up the stock market.
In 2018, Markets started crashing only in September2018 to Dec 2018.

Fed Funds rate was 1.91 in September 2018 to 2.40 in December 2018 before it quickly backed off after a 25% sell off.


We are already into a 14% sell off and Fed is just getting started at .75% expected to go to3%.
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Re: Markets are crashing As Fed is raising Rates

Post by JoMoney »

I was getting a bit spooked at the US market levels at the end of 2020 / beginning of 2021. S&P 500 is still up over 12% since then, and up over 33% since the beginning of 2020 (roughly 18 months ago, and that's BEFORE the COVID drop! which was much deeper than anything we've seen yet this year)
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Re: Markets are crashing As Fed is raising Rates

Post by arcticpineapplecorp. »

NYCwriter wrote: Fri May 06, 2022 1:57 am
arcticpineapplecorp. wrote: Thu May 05, 2022 8:05 pm
invest2bfree wrote: Thu May 05, 2022 7:14 pm Is there going to be a massive crash ahead?
my crystal ball is cloudy.

making predictions is hard, especially about the future.
“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently.”
— John C. Bogle

On the importance of sticking to your plan, no matter what happens:

“The winning formula for success in investing is owning the entire stock market through an index fund, and then doing nothing. Just stay the course.”
— John C. Bogle
......

source: https://financinglife.org/bogle-quotes/
You forgot to mention his prediction in 2018 that the market would return a paltry 3-4% at best....
In general, his advice was great. But he was as much a failure at predicting what the market would do as anyone else.
right, which is why he will be remembered for (among many things) repeatedly saying "stay the course". That's counter to predicting what might or might not happen. This is consistent with him saying countless times that "nobody knows nuthin'".
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Re: Markets are crashing As Fed is raising Rates

Post by Faisal »

Masters in Economics here. A simple fact that almost everyone forgets is that the economy is cyclical. Just like the sun will always rise in the East, the economy will over heat and head to a recession and then go back into expansion. I recall reading somewhere that the peaks and troughs for recession and growth are now getting longer and larger as globalization takes place.

The pandemic, the war in Ukraine, globalization, inflation all hastened the move towards a recession which was going to come anyway. The difference is how the Fed and global politics affect the "landing" in the US of A. In addition to these issues there are supply issues. If you read some of my earlier posts on the disconnection between the global economy in 2020/2021 and the market, people very rightly said the economy is not the market and vice versa.

There is always a recession on the Horizon, all that should matter to you is can you weather a recession based on your asset allocation and remember its time in the market and not timing the market.
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Re: Markets are crashing As Fed is raising Rates

Post by Whakamole »

invest2bfree wrote: Fri May 06, 2022 7:17 am
JoMoney wrote: Thu May 05, 2022 7:21 pm
invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.
...
No it's not, they were raising rates in 2018 as stocks fell... people were calling it a "taper tantrum".
Despite what some people seem to think, it's not the Fed's job to prop up the stock market.
In 2018, Markets started crashing only in September2018 to Dec 2018.

Fed Funds rate was 1.91 in September 2018 to 2.40 in December 2018 before it quickly backed off after a 25% sell off.
I still have some Vanguard Large Cap (VV) from TLH'ing in December.
MTKRC
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Re: Markets are crashing As Fed is raising Rates

Post by MTKRC »

DarkMatter731 wrote: Fri May 06, 2022 1:15 am
zaboomafoozarg wrote: Thu May 05, 2022 9:34 pm
AlohaJoe wrote: Thu May 05, 2022 9:12 pmPfft...you expect people to remember as far back as 2018 before making wild claims on the Internet? 2018 was like 1,000 years ago, wasn't it??
It is funny how few people on the internet seem to remember 2018, let alone 2008 or 1998.
I... I wasn't alive in 1998.

This is the first time I've personally experienced a high inflation environment. If there's a recession, it will be the first where I'll be affected by it.
Assuming you are gainfully employed, putting money into your 401k, and in the accumulation phase, a stock market downturn might be the best thing that could happen for you. You will be buying more shares each month and your future self will benefit from the downturn.
000
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Re: Markets are crashing As Fed is raising Rates

Post by 000 »

nisiprius wrote: Fri May 06, 2022 6:19 am Gotta look, gotta look... where the heck did I put my glasses...

Image
Really tempting fate with these posts. :shock:
Robot Monster
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Re: Markets are crashing As Fed is raising Rates

Post by Robot Monster »

rockstar wrote: Thu May 05, 2022 7:57 pm
nisiprius wrote: Thu May 05, 2022 7:51 pm
JoMoney wrote: Thu May 05, 2022 7:21 pm...Despite what some people seem to think, it's not the Fed's job to prop up the stock market...
Indeed. To be clear, the Fed's job is written into law, the so-called "dual" mandate, and it is:
to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.
Nothing in there about the stock market.

It's normal and to be expected that if interest rates rise, the market value of both stocks and bonds will fall, and for the same reason. They both represent dollar benefits that will be paid sometime in the future.

When interest rates rise, dollars that will be paid in the future are worth less today than they were. When the interest rate is 1%, $100 today will grow to $101 in a year. So $101 you will get a year from now is worth $100 today. So $100 a year from now is worth about 1% less than $100, or about $99.

If the interest rate rises to 2%, $100 a year from now is only worth about $98 today.

When interest rates rise, promises of future money become worth less today.

Both stocks and bonds represent a hope of future dollar benefits. They are an estimate of prevent value of future payments. If the future benefits don't change, then a rise in interest rates makes both stocks and bonds worth less today, and their present value falls together.
However, you if you read Ben's book about his time as chairman, the Fed absolutely monitors markets.
Yep. Apparently, one of the reasons the Fed delayed tightening when inflation was staring them smack in the face is they didn't want to shock the market.

From a CNBC article today, "Bernanke says the Fed’s slow response to inflation ‘was a mistake’":
Bernanke said he understands why the Powell Fed waited.

“One of the reasons was that they wanted not to shock the market,” he said. “Jay Powell was on my board during the Taper Tantrum in 2013, which was a very unpleasant experience. He wanted to avoid that kind of thing by giving people as much warning as possible. And so that gradualism was one of several reasons why the Fed didn’t respond more quickly to the inflationary pressure in the middle of 2021.”

Bernanke’s new book, “21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19” gets released tomorrow, but it's $35 in hardcover on Amazon, at least.
Tom_T
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Re: Markets are crashing As Fed is raising Rates

Post by Tom_T »

Robot Monster wrote: Mon May 16, 2022 9:06 am Bernanke’s new book, “21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19” gets released tomorrow, but it's $35 in hardcover on Amazon, at least.
I'll wait for a bear market on that price. ;)
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AerialWombat
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Re: Markets are crashing As Fed is raising Rates

Post by AerialWombat »

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Last edited by AerialWombat on Mon May 23, 2022 2:38 am, edited 1 time in total.
This post is a work of fiction. Any similarity to real financial advice is purely coincidental.
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BrooklynInvest
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Re: Markets are crashing As Fed is raising Rates

Post by BrooklynInvest »

MTKRC wrote: Fri May 06, 2022 11:54 am
Assuming you are gainfully employed, putting money into your 401k, and in the accumulation phase, a stock market downturn might be the best thing that could happen for you. You will be buying more shares each month and your future self will benefit from the downturn.
Based on years of experience, this.

And for those of us that are near the withdrawal phase our asset allocation means we're positioned to weather this without losing sleep. My to do list: Do a little more consulting so I can reduce my withdrawals and my future self will have a few bucks more.
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invest2bfree
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Re: Markets are crashing As Fed is raising Rates

Post by invest2bfree »

invest2bfree wrote: Thu May 05, 2022 7:14 pm This is the first time in a long time like in 1981 that Fed is raising rates as the markets are crashing.

https://fred.stlouisfed.org/series/FEDFUNDS

Also Bonds are selling off at the same time Stocks are crashing.

If the Fed Funds rate is going to be 3% then it is going to be 5 more months of the rate increases.

If you look at the Dollar it is going up as we speak without even serious sell off. I cant believe what will happen to the dollar when the markets crash 40%.

https://seekingalpha.com/symbol/UUP

Is there going to be a massive crash ahead?
Looks like my thesis is going to play out.

There is no way markets are going to reverse until Fed reverses.

We have a good three rate hikes, then we pause. If rate hikes continue then all bets are off.
36% (IRA) - Individual LT Corporate Bonds , 33%(taxable) - schy, 33%(taxable) - SCHD Dividend Growth
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