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The vast majority of retail client accounts lose money when trading CFDs.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Dow Jones (US30) Rally Falters After Federal Reserve Meeting

The Dow Jones delivered a classic “buy the rumour, sell the fact” moment.

The Federal Reserve hiked interest rates as expected but hinted at a slowdown in the months ahead. That led to an initial sell-off for the Dow. 

US30 – 4H Chart

us30 4 hour chart

The latest rate hike from the Federal Open Market Committee puts US interest rates at their highest since December 2007. 

The Federal Reserve hinted at a slowdown in rate hikes, and traders call it a “soft pivot”. Whilst terminal rate expectations have dropped, the market is still seeing higher rates for longer.

Eric Winograd, the senior economist at AllianceBernstein, said: 

“The statement is clear that they would like to slow the pace of hikes. In addition to looking at the data and markets, they are now considering the cumulative impact of what they have already done. And the lag with what will hit the economy. Most estimates are that it takes 9-12 months for rate hikes to be felt and 12-18 months for the maximum effect. We are only eight months past the first rate hike, so it makes sense to slow down.” 

The Dow Jones dropped 700 points after Jerome Powell said there was a “way to go” on interest rate hikes after the aggressive moves failed to dampen inflation by a great deal. 

However, Federal Reserve Chair Jerome Powell also said that the central bank had the tools to support economic activity if they over-tightened monetary policy. That could mean a higher cost of capital with interest rates with some form of business support or stimulus. 

“We expect that ongoing increases will be appropriate,” the Fed chair said. “It’s very premature to think about pausing. We have a way to go”. 

Tomorrow brings US ISM Non-Manufacturing PMI, with markets expecting a 55.5 print versus last month’s 56.7. A slowdown, but the services sector is still advancing.

Last Updated: 03/11/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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