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Apart from the election, all other stars seem aligned for a rate hike. The IMF gave the Fed a green light in terms of emerging-market expectations. Persistently dovish voices such as Charles Evans of the Chicago Fed and Lael Brainard, a Fed governor, have either been supportive of a rate hike or have remained silent lately.
The only thing that could throw the Fed off this path would be if a 10% stock market correction from a Trump win turned into a 15% or 20% collapse with global contagion. However, I expect that once the 10% correction is over, investors will take a second look at Trump’s policies of low taxes, less regulation and big infrastructure spending and like what they see. This means stocks may stage a post-election rebound soon after any correction.
But for now, a December rate hike is in the cards and almost nothing can stop it.
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Read more at https://dailyreckoning.com/expect-trump-win-violent-market-repricing
Apart from the election, all other stars seem aligned for a rate hike. The IMF gave the Fed a green light in terms of emerging-market expectations. Persistently dovish voices such as Charles Evans of the Chicago Fed and Lael Brainard, a Fed governor, have either been supportive of a rate hike or have remained silent lately.The only thing that could throw the Fed off this path would be if a 10% stock market correction from a Trump win turned into a 15% or 20% collapse with global contagion. However, I expect that once the 10% correction is over, investors will take a second look at Trump’s policies of low taxes, less regulation and big infrastructure spending and like what they see. This means stocks may stage a post-election rebound soon after any correction.
But for now, a December rate hike is in the cards and almost nothing can stop it.
<<<
Read more at https://dailyreckoning.com/expect-trump-win-violent-market-repricing
