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Marc Chandler – 2022 Outlook On Fed Policy, Interest Rates, Currencies, and US General Markets

Shad Marquitz
January 14, 2022

Marc Chandler, Managing Partner at Bannockburn Global ForEx joins us to share his 2022 outlook on the general markets in relation to the Fed monetary policy, interest rates, currencies, and geopolitics. We start off discuss what effect the change in the market expectations around the Federal reserve finishing tapering, possibly getting in 4 rate hikes, and also a reduction of their balance sheet may mean for the general equity markets.

 

From the bullish perspective, Marc pointed out that we are in a strong M&A period of corporate consolidation and in corporate balance sheet strength, paired with a backdrop of 1.8% 10-year treasury rates that are still low enough to be stimulative to the markets when real rates are still so steeply negative.

 

From the bearish perspective, Marc notes that the pent-up surge in consumer demand we saw last year has already tapped most families excess savings, and that the last 3 economic downturns came after oil prices essentially doubled.  When those factors are weighed along with 3-4 rate hikes and a Fed balance sheet reduction, it may prove to be too much and turn the economy down.

 

We wrap up with a look abroad at the currency markets, where most of the other central banks are also tightening monetary policy, and there are no shortage of geopolitical cross currents. In particular we review what forces may be behind the recent dollar weakness, and moves in the Euro, Canadian Dollar, and Pound.  

Click here to visit Marc’s website and keep up to date on his daily market and data comments.

Discussion
8 Comments
    BDC
    Jan 14, 2022 14:50 PM

    Dollar Week Update : Tweezers Bottom : Will It Hold?
    https://saturationtiming.blogspot.com/2022/01/dollar-week_11.html

    Reply
      Jan 17, 2022 17:08 AM

      interesting bullish engulfing candle stick formation…lmao

      thank you

      Reply
    Jan 14, 2022 14:27 PM

    There is a new good article on http://www.wallstreetonparade.com concerning improper actions of The Fed and some comments by Michael Hudson. Some things just seem to continue.

    Reply
      Jan 14, 2022 14:48 PM

      This is a must read article for those that think one political party or the other is responsible for the dysfunction in our democracy. Consider criminal coverup and transfer of wealth.

      Reply
    Jan 14, 2022 14:10 PM

    The buck might bounce for a day or three but I think it’s going lower.
    https://stockcharts.com/h-sc/ui?s=UUP&p=D&yr=1&mn=0&dy=0&id=p30342143606&a=1097450982

    Reply
    Jan 14, 2022 14:32 PM

    Marc Chandler mentioned South Korea just hiking interest rates to fight inflation in the interview above.

    Here’s a presser on that.
    __________________________________________________________________________________________________
    .
    South Korea’s central bank raises rates amid inflation worries
    .
    January 13, 2022 – Reuters
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    “South Korea’s central bank raised its benchmark rate back to where it was before the pandemic on Friday, seeking to restrain inflation and household debt growth as global policymakers move to end emergency stimulus to contain rapid consumer price rises.”
    .
    https://www.cnbc.com/2022/01/14/south-koreas-central-bank-raises-rates-amid-inflation-worries.html

    Reply

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