TLT dangerously close to 2008 support

12 giu 2022

TLT not looking to HOT here. The federal reserve has the following 3 options:

1) Stick to 0.50 basis points and continue the slow bleed. ~ This will piss off investors with cash on the sidelines and will most like hit the market harder.
2) Get aggressive and raise 0.75-1 basis point ~ Market may react positively. This would show the federal reserve is "serious" on fighting inflation.
3) Take the foot off the accelerator and step back into the market. Using macro environment as an excuse, for example Russia invasion of Ukraine and China lockdowns.

I think it is noteworthy to mention that China has lowered their interest rates and are outperforming US equities. It honestly looks way more attractive and this is something the fed will have to ponder. This is a lose/lose battle because the federal reserve cannot magically print supply.