All eyes are on the U.S. Federal Reserve on Wednesday, as investors await further insight into how much could the rates go up this year and when are hikes expected to begin.
Cramer’s remarks on CNBC’s Investing Club
Today is almost given to be about clues only. The central bank is unlikely to adjust policy or raise rates in today’s meeting. Still, CNBC’s Jim Cramer says chairman Powell’s comments will create a buying opportunity for equity investors on Wednesday.
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There is going to be a moment today in the Fed meeting where Jerome Powell comes out at 02:30, and he is going to say something that will be interpreted as negative for the stock market. That may be your chance to take advantage of that decline.
The S&P 500 index hasn’t taken out its Monday’s low of 4,240 that he sees as another indication that the benchmark might be set to bounce back. Earlier this week, David Bahnsen said Fed was “NOT” what’s driving the market sell-off.
Should the Fed resort to less than four rate hikes?
The recent weakness in PMIs and wage expectations has spurred talks of less than four rate hikes in 2022, but the former Federal Reserve governor, Frederic Mishkin, is unsure if that’ll be a good idea. On CNBC’s “Squawk on the Street”, he said:
The Fed is behind the curve, so, despite weakness and worries of omicron, when you’re behind the curve, you’ve got to do your job. We’ve had inflation much higher than we expected. So, they need to tighten and they need to get to it. There’s no reason for them to move in the other direction.
Mishkin, however, doesn’t see the need for a 50 basis points increase. A quarter-percentage-point raise in March, he added, will be sufficient.
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