The Fed Reserve hiked interest rates by 75bp as expected. Jerome Powell also mentioned the need for ongoing interest rate adjustments moving forward. In the same breath, he stated he is going back to data-driven decision making on interest rates, so if inflation starts coming down, he might adjust interest rates less than expected. The market rallied hard off this comment.

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In his next segment, he stated “The Fed will be continuing the process of significantly reducing the balance sheet.” While the balance sheet has not been decreased over the last few months as expected, once this starts things could get worse than they are now. He said it could be 2 - 2.5 years before we find a new balance sheet equilibrium, which puts continued downside on the market over the next few years.

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While the market pumped yesterday, this Fed meeting urges lots of caution going forward ⚠️

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More rate hikes, continued QT, Powell states most effects have not been felt yet.

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🚨 This is a short term run in a sustained bear market. 🚨