Fears of Aggressive Rate Hikes

Just when we are about to celebrate when Powell shared last week that it was time to slow the pace of upcoming interest rate hikes, the fears of aggressive rate hikes came back.

From the news, I read that U.S. services industry reported better than expected data. In November, employment was rebounding and wage growth was accelerating. Consumers spent more in October.

You might be wondering “Isn’t it good news?” Well, the downside is that it means inflation is still possibly rising. This also means that the Fed may still stick to their plan for aggressive rate hikes in order to curb inflation.

As you can see below, the stock market is smart and reacted accordingly to the news. DJIA, NASDAQ and S&P 500 declined by 1.40%, 1.93% and 1.79% respectively.

S&P 500 5 Dec 2022

What Does It Mean For Me?

I am just sharing my thought. I thought the boat has sailed but the stock market is really unpredictable. Opportunities still exists when you thought you are late to enter the market. Be patient and wait for the next opportunity.

I previously wrote that the interest rate for Singapore Savings Bonds may be lower in upcoming months because Fed is slowing their pace of rate hikes. With the twist of events, there can still be an opportunity to purchase upcoming Singapore Savings Bonds with higher interest rates than SBJAN23.

I should also spread out my purchases instead of trying to time the market.

What tips do you have to share in the current unpredictable stock market?

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