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Don’t Be Fooled by the Market Rally on Fed News

(12/16/21) Markets loved the Fed's announcement that tapering will commence, and the rate of change in rates will be accelerate: Three interest rate hikes in 2022, and three more in 2023. If inflation continues to rage (now termed "non-transitory"), there is a likelihood those rate hikes will become even more fast and furious. This more-hawkish mood of the Fed did not deter markets, rising sharply on the announcement, and the S&P could hit 4700 over the next few days. Markets are, however, very over-bought, limiting the upside somewhat. The recent selling has been a function of mutual fund "window dressing" as year-end approaches. Of continuing concern lately has been the lack of volume--even in yesterday's strong rally. And, markets are now set-up for the classic, end-of-the-year rally. The first five days of January will see mutual funds resetting their positions in the New Year, and we're going to be a little more cautious in our outlooks, with significant headwinds coming our way: tighter monetary policy, weaker economic growth, shrinking profit margins, etc.
- Hosted by RIA Advisors Chief Investment Strategist, Lance Roberts
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Lance Roberts
Finally, financial news that makes sense. Lance Roberts, the host of "StreetTalkLive", has a unique ability to bring the complex world of economics, investing and personal financial wealth building to you in simple, easy and informative ways but also makes it entertaining to listen to at the same time.
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