Market tumbled on Fed's plan to wind down corporate bonds
Hello everyone. The big news today is Fed's plan to sell off the corporate bond portfolio it amassed in the midst of covid-19 crisis last year. The portfolio is worth of $13.8 billion.
Why stocks, commodities and forex reacted to the news? It's a signal that Fed is about to tighten the policy soon.
Who will benefit from Fed's tapering? The answer is US dollar.
Who will be hurt? Stocks, commodities, e.g. gold. I noticed that gold dropped by over $30 today.
In my opinion, that's the first step before eventually raise the interest rate. That's a warning sign for stock buyers. You'd better preparing for rebalancing your portfolio as soon as possible.
Why stocks, commodities and forex reacted to the news? It's a signal that Fed is about to tighten the policy soon.
Who will benefit from Fed's tapering? The answer is US dollar.
Who will be hurt? Stocks, commodities, e.g. gold. I noticed that gold dropped by over $30 today.
In my opinion, that's the first step before eventually raise the interest rate. That's a warning sign for stock buyers. You'd better preparing for rebalancing your portfolio as soon as possible.
הערה:
I've posted three symbol charts. It's important to check multiple markets that correlate with each other.
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