Do Fed Comments Cause Too Much Volatility in the Stock Market?
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- Опубліковано 7 чер 2024
- A growing body of research shows how comments from Federal Reserve members move financial markets. Longterm transparency efforts from the Fed have resulted in more communication with the public today than ever before. But some argue that the Fed's communication and forecasting framework may be contributing to undue market volatility. When it comes to "Fed speak," how much is too much?
Produced by Merritt Enright
Edited by: Kevin Heinz
Graphics: Jason Reginato and Christina Lopoco
Supervising Producer: Jeff Morganteen
Additional Footage: Getty Images, U.S. Federal Reserve, C-Span
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Fedspeak: Does The Federal Reserve Talk Too Much?
It's interesting that when central banks like the Fed start raising interest rates, inflation of more than 2% has been a concern. Since more investors would surely take their money out of the stock market as a result of the rising interest rate, I view this as a very significant problem. However, there are still some investors that I know of that make more than $280K. I wish I could pull that off.
Quite likely! especially in the present market. Many opportunities exist to yield superior results, but these kinds of complex deals are best left to the experienced professionals in the market.
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I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.
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The market and the Fed consistently underestimate the sticky nature of inflation. The markets are still unsure if the Federal Reserve will continue to its plan to raise interest rates until inflation is under control, despite the fact that bond yields are rising while stock prices are falling. What is the greatest strategy to take advantage of the current bear market while I'm still deciding whether to sell my $400k worth of stocks?
Even though there will probably be more pain in the future, investors should look for stocks like Royal Philips NV and Alstom SA that have been sufficiently battered down to be a bargain or get a great portfolio manager.
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Interesting how over 2% inflation has been a concern when central banks and the Fed begin to hike interest rates. I consider the rising interest rate to be a very serious issue since it will undoubtedly cause more investors to withdraw their money from the stock market. But then I'm still aware of certain investors that continue to earn over $365,000. Wish I could accomplish that.
Very possible! Particularly in the current market. There are several opportunities to generate excellent returns, but such intricate transactions can only be carried out by seasoned market professionals.
No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise fromm early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 2024
This sounds interesting. My portfolio is in the red. Can you recommend your analyst, please?
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The S&P 500 moved 8.9% higher last Month, achieving one of its best monthly performances in history.. which is an indicator for profits to continue to improve. I just want my money to keep outgrowing the inflation rate. I'm still looking for companies to make additions to my $500K portfolio, to boost performance. Here for ideas...
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The rising interest rate can surely control inflation, but won't prevent erosion of the eroding purchasing power of the US dollar. I have learnt my lesson this time. The banks can't be making money off my money, while inflation eats into it. I have set aside 650k to invest in the stock market now, since that keeps up with inflation, but I don't know how to get started.
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How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
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Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
Fed should just update us every quarter if nothing major is happening. No point in talking if you’re saying the same thing with different words 🙄
giving ChatGPT a run for its money
Would just make the occasions they do talk make the market react more
Youre not paying close enough attention. They make changes to guidance every meeting. And central banks being transparent is only a positive.
You need to allow banks to prep with some lead time. That’s why they over communicate at a constant clip
The ETF and stock markets are still quite volatile, just like the property market. My $670K portfolio is down by 15% even as the stock market is on the rise lately. what’s the best way to correct my portfolio?
Many people are still getting fantastic returns on their investments during this time. Simply maintain a strong sense of reality or ask for professional assistance.
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Central Banks should be transparent. I don't see this as an issue. And fed speak is a form of transmission of monetary policy.
Agreed. If government institutions can make choices that affect entire markets. Transparency is key.
I completely agree with this. It might cause more short term movements (or at least more often), but it minimises the surprise caused by their actions and it's fair for everyone.
How about not during market hours ?
But they only say what they think people need to hear
@@TurdFergusen Thats their job.
what can I do? I am 65 years old at the verge of retirement. My portfoliio of $450k is down to $192k, How can I profit from the present market.
The market is volatile at this time, hence i will suggest you get yourself a financial-advisor that can provide you with entry and exit points on the shares/ETF you focus on.
Very true , I diversified my $400K portfolio across multiple market with the aid of an investment advisor, I have been able to generate over $325k in net profit across high dividend yield stocks, ETF and bonds in few months.
That’s stirring! Do you mind connecting me to your advisor please. I desperately need one to diversified my portfolio.
Could you kindly leave your investment advisor's contact information here? I absolutely must have one.
Can you share details of your advisor? I want to invest my increased cash flow in stocks and alternative assets to achieve financial goals.
When the Fed chair's mouth opens the markets move
oh, I move, like a hot pocket, I move
They federal reserve: They are not doing their job until you lose your job.
Too many fed officials speaking can be too much.
Or take advantage 🤷♂️
Yes we only need bostics opinion. No one else lol
@@CommonSense-uj9ip lol you sound ridiculous
@@mikebostic9518 it was a joke ! 😄. Raphael W. Bostic (born June 5, 1966) is an American economist, academic, and public servant who has served as the 15th president and CEO of the Federal Reserve Bank of Atlanta since 2017.
Yes, they need quarterly reports and bi-yearly press conferences and q&a.
I swear I feel like people are like babies sometimes. The fed has said time and time again that things will change depending on how the market is. Idk how hard it is for people to understand that this means the fed doesn’t know.
Simple. They only complain when they’re at the wrong side of the market.
they also said inflation was transitory....which speak directly to their lack of credibility. How can they be that wrong? Or how can they know it wasn't transitory and lie to everyone? Also, no one other then Powell should be able to speak publicly. Even if he likes to use lots of words to say nothing....the only thing worse is when other fed members speak publicly and contradict the already vague message.
right, seriously, take a drink of water, and chill
@phmg7516 They only use our current means of evaluating inflation. Problem is that the metrics are flawed. They dont include housing, spread out increases in rent, and only use unemployment rates to track the job market and wages. The values aren't weighted relevant to how they effect an overall budget. If so the numbers would have looked far worse over the last few years.
Things will change depending on inflation, employment and stability in these two metrics. Not "the market". The markets aren't a part of their remit
The problem is not the quantity, but the credibility of Fed’s statements.
Markets were jittery because Fed always made wrong predictions. By the end of 2023 they had said it could slash rates; then reversed back from that stance this year.
In 2021 they kept saying inflation was transitory but it eventually shot up to 9%.
Banks like SVB defaulted because they were wrong-footed on Fed’s interest rate guidance.
People manage their finances (mortgages, business loans) based on interest-rate expectations, but even the Fed’s hundreds of PhDs are seemingly clueless about it
The Fed is trying to save the current administration. That's the problem.
I don’t mind it. Only people trippin out about market volatility are day traders.
“Just because a number comes out that doesn’t jive with your forecast, doesn’t mean you should change your forecast or change your outlook”
Is this a statement for the Fed or investors because it seems that both sides don’t have a real framework or outlook.
Maybe media/news companies shouldn't push out so much content whenever the Fed does speak. Just provide a link to the official post from fhe Fed and let interested parties inform themselves.
Most people can't clearly define what inflation is, so I doubt they'll understand most of what Fed officials are speaking about.
Yes, I love when a non voting member decides they want to say something contrarian in the middle of the trading day that sends the market down 1%+ for absolutely no other reason
The Fed should be investigated for market manipulation at this point, given how much they affect the market and how often they keep speaking.
Market manipulation 🤣 They own $2.4 trillion in MBS. They could sell it all in a single day and there wouldn't be a market to manipulate.
Lol, they are the originator of all wealth. Why do they need to manipulate markets.
Years ago the Fed did not remark every other day! No need for it. Ridiculous!!!
You know it's gotten outta hand when even retired Fed members speaking moves the market.
volatility equals opportunity, let them speak all they want.
The world is highly uncertain and change occurs frequently now. The Federal Reserve is trying to guide the economy forward and that is difficult.
The worst part is not only the American Economics that rattles when the federal bank says something but also the central banks of other nations who anticipate their every move to protect their respective economies. So much power has been given to the US Federal Reserve but I can't blame them, they need to be frugal about making statements.
Market volatility is a good thing, not a problem.
Too much temptation for fed members and their cohorts (family, friends,etc) to trade the markets prior to said announcements and make tons of money…etf’s, etc.
YES. They always remind us of what went wrong, or what is GOING to go wrong!
they are what's wrong. They are the problem....not the solution
These are the world's great moments in which honorable people with living consciences will change injustice into right and war into peace
They also come out and speak to keep things transparent to the common public and not just for the stock people. If the stock market is over speculating on everything, then it's not their fault really.
Fed speak is like music to the ear. It can be cheerful or melancholy, but always moving.
I mean they say repeatedly that they focus on their two mandates and will move depending on the data. Everything else is just fluff and it’s not their fault if people want to make assumptions
This guy gets it. The people listening are definitely the problem 😂
Of course. They did it on propose obviously.
“Pay no attention to that man behind the curtain!”
-The Wizard of Oz
YES
YES it does and CNBC LOVES IT, In fact they talk about it more than the Fed.
Years ago a reaches the conclusion that was an strategy to not openly disclose market moves!
Uncertainty has been the WORD out of the Jerome Power mouth! I’m surprised that CNBC is speaking out about this, probably is also part of the strategy!
Yes. It should have never gotten ahead of itself and talked about cutting rates. Now it is backpedaling
What if there was just a fixed supply of infinitely divisible money and we just let the free market determine interest rates?
Thanks for keeping us updated! I feel sympathy
and empathy for our country. low income people
are suffering to survive, and I appreciate Deborah.
You've helped my family with your advice. imagine
investing $30,000 and receiving $95,460 after 28
days of trading.
I began investing in stocks and Def earlier
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made. My portfolio is rounding up to almost
a million, and I have realized that when a
stock makes it to the news. Chances are
you're quite late to the party, the idea is to
get in early on blue chips before it becomes
public. There are lots of life changing
opportunities in the market, and maximize
it.
What opportunities are there in the market,
and how do l profit from it?
You can make a lot of money from the
market regardless of whether it strengthens
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I would really like to know how this actually
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All you need is a good capital, and the
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That is the point. If the market rallies... if the market corrects... this is by choice.
Once per quarter is plenty to keep the general public informed, everyone else already knows.
I think what they are doing is fine - market is just being market and being way overreactive to what they say. But they should communicate in a scenario based manner. Currently they focus on base case too much
I like it keep😜🤪😝 rocking
Transparency in government is good
Yes it does
They Will not cut for sure !!!
Traveling? Have you seen the NBA these days bro?😂
volatility benefits some people
It trickles down to us lowly people if we just ride coat tails of what the big money does. We benefit indirectly with accounts growing over time. But you have to watch it go up and down like a doodle .. doesn't profess in a straight up line. But we know over time it has always gone up to higher highs .. helps more people around the world are entering the market
@karmasutra4774 if someone can move the market big time in just a few words, there is strong potential for insider trade
Yes but that gives buying opportunities.
What stops the FED from speculating the market to benefit the US Dollar?
Talk to much and TAKE TOO MUCH!!!😡😡😡
I think the real issue is we think the market is the only thing to measure our country by. The old fashioned prudent ways of running a business long term are all gone and only care about the stock price. If we focused on how to run our businesses we wouldn’t are so much about the fed.
25 bps interest reduction will be absorbed by growing US economy. But either hiking or keeping high will harm middleclass. They pay everywhere more but no opportunity to make small money in ewuity too!
Мои поздравления) Вот это заносы редкие) кайф что хотя бы посмотрел на такие)
Fed will do a news conference in response to this video
Just pay attention to J. Powell... it is not that difficult, just ignore all of the other noise.
Before, people critized the federal reserve by not being "transparent" and not communicative. Now, it seems to be the contrary.... pfff... human psychology. I can't understand it.
Their job is not to predict and create market scenarios in the near term future for public divulgation ... that's impossible and far worse to market price stability. They already do that somehow with their fed rate cuts projections. They react in terms of the data they receive, so simple as that. They are doing a good job with the options and tools they dispose currently.
JP is good
As a great man once said, "quit your jibber jabber"
Fed members are adding too much noise to the already noisy market
Bring inflation down .that’s what ny stock exchange should listen .
Where ever one talk too much. He screws something up bad.
The fed talk what they need to speak. The market is the problem, traders use fed chair's words to move the market.
Yep.. sell the news .. always go with the momentum
Not only does it talk too much, it gets too much credibility.
yes way too much.
This is intentional. It keeps the fed in control of the situation.
Fed speak is foreplay
"The Federal Reserve System is not Federal; it has no reserves, and is not even a system at all. But rather an international criminal syndicate."- Eustace Mullins.
and you said my comments were bad
Look at the data, real life data, not just reports that are "corrected" (manipulated). Anyone that believes rates will come down soon knows nothing of the financial markets.
Yes and no. It talks too much for people who don't know what they're talking about which confuses a lot of traders and investors. For those who know what they're talking about and the implications, we enjoy the transparency. It's great for day trading.
If you're day trading, then I automatically assume you don't know what you're talking about.
@@hellzshotgun You can assume anything you want, it doesn't change my P&L's in the slightest 😂
Absolutely, JP listened to too many day time analysts, and that's why he is fking up.
Other board members cannot wait to jump in front of the camera's and start yapping a way, over inflating there importance.
It's a market problem
Not fed problem
What more can the Fed do with keeping inflation under control?…Dealing with high inflation is hurting the future of Americans and their families.
All talk no act
They all put their trades in before the speech.....easy 15% gain
😂😂😂😂 lets see 4000
We shouldn’t even have a Fed.
🤑
Maybe they speak so much because their policies have little impact so they need to rely on their announcements and hope that they will influence the economy 🤔
The stock market isn't a part of their remit.
Stocks going up, people getting fired 🎉
The Fed talking is not a problem the problem is the usual jumpy "experts" that take every word like gospel.
just an excuse for hedge funds to jerk each other around with their algos. market ran up to year end consensus by the end of march. of course there will be some selling. now they are going to try and time a bottom over the next few weeks / months
FED IS NOT CLEAR WHAT IS WRONG & WHAT IS THE SOLUTION..........THEY MUST BE REPLACED ASAP.......INTEREST RATE ONLY IS NOT GOING TO RESOLVE INFLATION ISSUE UNLESS RETAIL PRICES ARE CEASED....NO JACK UPS .
It’s all corrupted
1 John 5:19
The Fed does more Jaw Jacking than actual work😂😂
too much yapping can hurt the market
What are they talking about? Dumb it down please
IT IS NOT FED SPEAKS TOO MUCH. IT IS CNBC SPEAKS TOO MUCH ABT FED AND EVERYTHING ABT STOCK MARKET
Yes. They should shut up
Just sold EVERYTHING. Now waiting a decade for a Great Depression level event so we can maybe own a home one day.
77 bids over 4 yrs for our first home in TN all beat by cash buyers. Everything in this country belongs to one class of people.
He’s beyond insufferable, he’s obviously shorting the entire S&P 500.
Basically Powell is terrible & needs to be removed
The more he speaks the more credibility he loses. They have no clue what they are doing.
Non farm report 😞😞 was Very BAD. report SHOW THAT USA ECONOMY IS GOING TO HELL TO HARD RECESSION LANDING. ON MONDAY WE WILL SEE A BIG DROPPING IN S P. 2d cutting WILL BE MAYBE AFTER 2D QUARTER OF ....2025!! 😢😢😢 PREPARE FOR MARKET CORRECTION ON MONDAY. forget about rally BE FRIENDS WITH ELEMENTARY LOGIC