US inflation is slowing down: is it time for a FED pivot?

US stock rose on Thursday

Yesterday has been the third positive day for Wall Street.

All three major indexes have closed in profit.

The S&P 500 closed at +0.34%, the Nasdaq and the Dow Jones both ended the trading session at +0.64%.

Investors have celebrated the slowdown of inflation.

Inflation is slowing down: is it time for a Fed pivot?

On Thursday, the Department of Labor released its annual consumer price growth for the month of December.

In the US, the inflation for the last month of 2022 was at 6.5% exactly as forecasted by economists.

The CPI has slowed down from 7.1% in November.

With the latest inflation data, investors are now expecting a less aggressive interest rate hike by the Federal Reserve at the next meeting.

Investors are now talking about a potential pivot despite the Federal reserve members’ speech that have said multiple times that interest rates, most probably, are not going down until 2024.

The US central bank lifted rates by 50 basis points following four consecutive rate hikes of 75 basis points.

At the moment, the majority of the investors are expecting a 0,25% rate increase at the next Federal reserve meeting.

The chart below shows real-time data.

FedWatch Tool – FED rates probabilities

92.7% of investors are expecting the FED to increase the interest rates by 0.25% at the next meeting.

The remaining 7.3% are expecting a 0.50% rate increase.



The number of investors expecting a rate increase of 0.25% has drastically increased after the positive CPI data.

No other options are considered at this time.

The next FED meeting is on 1 February 2023.

Portfolio Update

I am monitoring the short positions on stocks and ETFs and I will act accordingly.

This will allow my portfolio to make a profit if the market drops.

The fundamentals remain bearish, so I am neutral at the moment, based on the current FED monetary policy.

However, I am aiming to make a profit regardless of the market direction.

If you are already copying my portfolio, please keep the copy open.

If you are thinking of copying me, now could be the right time, if you can invest for the long term (years).

Remember to copy the open trades to optimize the copy.

Remember to set the stop loss on the copy at the minimum level, so you don’t get stopped if there is a correction.

Thank you, everyone. Have a nice day!

Steps to follow to copy my portfolio automatically:

1. Create an eToro account here: https://federicamontella.com/go/etoro/

2. Verify your account and make a deposit of at least 200 USD (you can deposit in any currency, like GBP and EUR)

3. Go to my profile page: https://federicamontella.com/go/etoro-passionforprofit/

4. Start the copy (copy open trades and set the lowest stop loss possible, to allow some movement)

5. Enjoy, it’s all automatic. You will make passive income 24/7

Let me know if you have any questions.

 

Federica Montella

eToro Popular Investor

 

Follow me on social media

LinkedIn

Facebook

Twitter

Instagram

YouTube

Sign up to receive my latest articles in your inbox



Author: Federica Montella
eToro Popular Investor, food lover and blogger. Stock trader and Popular Investor at eToro. I am on a mission to find the best restaurants and food to eat.