Short comment
US Federal Reserve confirmed dovish stance as expected and the expectation of freezing Federal Funds Rate for this March meeting is formed with the stance. Stocks and bonds went up yesterday.
The situation looks like the best, but what I worry is that there is not enough volatility. Rising stock indices got no problem considering still strong US macroeconomic indices. High governmental officials and some corporate leaders have suggested that the worry for the recession had been too much. Looks like participants are accepting that.
However, as a few players represented by Morgan Stanley are insisting, signals of the recession are real and could attack the market anytime. I am thinking the direction of the stock market is right, but no volatility in the situation isn't possible. Strong recovery as much as that of this month should have accompanied the volatility. The impact of the dovish message should be temporary and can't change real economy. My opinion about bullish stock matket is still valid, but the volatility could come up in the market soon.
US Federal Reserve confirmed dovish stance as expected and the expectation of freezing Federal Funds Rate for this March meeting is formed with the stance. Stocks and bonds went up yesterday.
The situation looks like the best, but what I worry is that there is not enough volatility. Rising stock indices got no problem considering still strong US macroeconomic indices. High governmental officials and some corporate leaders have suggested that the worry for the recession had been too much. Looks like participants are accepting that.
However, as a few players represented by Morgan Stanley are insisting, signals of the recession are real and could attack the market anytime. I am thinking the direction of the stock market is right, but no volatility in the situation isn't possible. Strong recovery as much as that of this month should have accompanied the volatility. The impact of the dovish message should be temporary and can't change real economy. My opinion about bullish stock matket is still valid, but the volatility could come up in the market soon.
I think it is the best time to buy US Treasuries. With the volatility, the dovish messages like showing patience about to raise the rate or ending the contraction of the Balance Sheets will give more advantage to the treasuries than the stocks.
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