In recent days, the stock market, especially technological ones, has been buffeted by sales pressure, stemming from the prospect of interest rate hikes by the Fed, ahead of schedule and may even start as soon as the asset purchase program ends, in other words, in March, which being clear anticipation of the normalization of monetary policy, is not at all an unlikely or surprising scenario for investors.
This is because, in mid-2021, a good part of the market suspected that the Fed’s mentality about high inflation being transitory was out of step with reality, so it was perfectly normal that the central bank’s bet would result in a faster action curve as soon as the numbers denied, which ended up happening at the end of last year. Therefore, if it is true that Powell and other members sinned by optimism, it is not valid to place on this error the burden of correction that was already anticipated and that even some claimed to be healthy, it remains to be seen what its dimension is, because it is correlated with the strength of the US dollar, it will be interesting to see how the EUR/USD pair reacts to a parity approach.
