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How Will the Fed Rate Decision Impact Stock Market? -Breaking

by Mike Robinson

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What will the Fed Rate Decision Have on Stock Markets?

Although the Fed’s decision to raise rates was initially hawkish, it was perceived by Powell as being more dovish once he spoke. Rates can be raised now, but they will fall later. NASDAQ stocks were the leaders, gaining more than 2% in the course of the day. The Dow, S&P 500 (SPY) and all put in solid performances as well. Although the 10-year Treasury yields were higher than their 30-year counterparts, they remained below recent highs. Read on below to find out more….Enjoy this version of my weekly comment published on December 15, 2021 by the POWR Options newsletter.

The NASDAQ 100 has been the top performer for the last 6 months. It is up almost 25% over that period. The S&P 500 has gained a very respectable 19% in the past half year while the Russell 2000 is slightly negative over the same period. How long this massive out-performance can last is anyone’s guess.

After the Fed meeting, Implied Volatility was pushed to the downside. Now, the value is just below 20. It’s back in the range of volatility that was capped by 16 on the downside and 22 on the upside. Barring major surprises, I see a steady decline towards the end of the year.

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