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Jeff Bishop Weekly Money Multiplier Service | What to Watch for in Fed Chair Powell’s Testimony

Stocks have sold off for three straight sessions. And with 21 days remaining until the next interest rate decision, all eyes this week are on the Fed’s Jerome Powell, as he’s been busy, giving a speech yesterday on “stress testing,” and is set to provide two testimonies in Washington, D.C.

As of this morning, there is a 99.7% chance that the Fed will cut interest rates in its July meeting.

In other words, it appears that the current market sell-off is probably more technical (related to price action) than it is to last week’s robust Non-Farm Payrolls.

After all, the Fed looks at several data points, and one month’s of Non-Farm Payrolls statistics shouldn’t have that much influence on their overall decision.

As for me, I’ve been trying to keep a balanced attack while studying the Fed’s actions.

(Want to see what’s under the hood?
Join my service is to get in the game)

But with the markets “fear index,” the VIX now creeping up to 15, I’m starting to lick my chops, thinking about all the opportunities in the market at the moment.

And yes, they include opportunities around this Fed catalyst. You see, Jerome is set to move these markets again… but if you aren’t paying attention to his clues… then you’ll totally miss it.

Don’t worry though, I’ve done the breakdown for you.

Contents

  • 1 Jerome Powell Set to Move the Markets… Again
    • 1.1 Could Powell Change the Market’s Mind About Rate Cuts?
    • 1.2 Language Clues
    • 1.3 Banking
    • 1.4 Are There Risks on the Table?

Jerome Powell Set to Move the Markets… Again

If you haven’t seen any of the headlines yet… Federal Reserve Chair Jerome Powell is heading to Congress, with his semi-annual Monetary Policy Report on Wednesday and Thursday.

Now, this will be an important report… and all eyes will be on Powell… and traders will be listening for clues as to where interest rates are headed. Not only that, the Federal Open Market Committee (FOMC) will release its June meeting minutes at 2:00 PM EST later.

That said, it’s a busy week in the macro department.

Yesterday, Powell gave welcoming remarks, regarding stress testing for banks. He noted large banks have added over $800B in common equity capital, which gives them a cushion to deal with losses in case things get sour. But that’s neither here nor there, as we care about what he’ll be saying about monetary policy.

Could Powell Change the Market’s Mind About Rate Cuts?

According to the CME FedWatch Tool, the market is pricing in a 97.6% chance of a rate cut.

Right now, the market is pointing to a 97.6% chance of a 0.25% cut, and 2.4% of unchanged rates.

Now, we haven’t seen a Federal Reserve Chair go against the market if it’s indicating a 100% chance in either direction in over 25 years…

… however, we’ve still got around 3 weeks until the FOMC meeting later this month… but that doesn’t mean Powell won’t use his speeches this week to dampen the market’s view for rate cuts.

That said, I’ll be watching closely for any clues as to where rates are headed because that could
uncover trading opportunities in the iShares 20+ Year Treasury Bond ETF (TLT), SPY, and QQQ.

For example, the market is still near all-time highs… and this speech could spark a selloff if the market doesn’t like what it hears from Powell.

If Powell points to a no rate cut decision in its July meeting… then look for TLT, which has been on a massive move higher, to pull back.

Right now, it’s wait and see with the Fed.

However, there will be some language clues that Powell will give, as we’ve seen before.

Language Clues

After the better-than-expected jobs report number last week, we saw the market actually pull back from all-time highs.

You see, the market is projecting a rate cut in the July meeting… and strong jobs growth doesn’t help with that argument.

Why?

Well, traders have been buying stocks in hope of a rate cut because that means money will be cheap, and it’ll be “injected” into the economy and increase corporate profits.

If Powell points to a strong jobs report and indicates the Fed will remain “patient” and look for further clues to decide whether they should cut rates… that could cause markets to crash…

… however, if he indicates the Fed will cut rates multiple times… then we could get to all-time highs. But there is a negative backdrop to this scenario. You see, if the Fed does cut rates…

… that means there is a problem with the economy. Although this news might be good over the short-term, the market might quickly realize this and we could see a steep pullback.

Right now, we’re seeing a large disconnect… bonds are going up and the market is going up, and generally, we don’t see this action too often.

But these speeches could potentially correct this disconnect.

This will be the last week he can give a clear signal to the market. Either way, we’ll know whether the Fed will cut rates or indicate its still unsure and needs to focus on the data.

However, if Powell is ambiguous with his comments and doesn’t give any specifics… then the market may interpret this as a sign that the Fed approves of the pricing-in of a 100% chance of a rate cut.

Now, there are a few other things I’ll be looking for in these speeches.

Banking

In addition to potentially moving the overall market, Powell could move big banks like JP Morgan Chase (JPM), Goldman Sachs (GS), Citigroup ( C ), and Bank of America (BAC). The Fed Chair is expected to be questioned about the Fed overseeing the U.S. banking industry.

Are There Risks on the Table?

Powell will also have to update Congress on the Fed’s assessment of risks on the table for the U.S. Now, what the Fed Chair says here will be very important.

You see, if there are increasing concerns slowing global trade growth, trade war, etc., then this uncertainty could strengthen the argument for a rate cut. That said, I’ll be waiting to see what Powell has to say about any potential headwinds for the economy.

The Fed has already stated it would step in, if necessary… and what matters right now is what the Fed sees as potential headwinds and how those risks are characterized.

Now, I’m going to be closely monitoring these meetings and looking for any potential signals for a rate cut… or no rate cut.

Source: WeeklyMoneyMultiplier.com | Original Link

Author John GladstonPosted on July 10, 2019Categories Jeff Bishop Real Users ReviewsTags charts, Dow Jones, ETFs, GS, Jeff Bishop Options Trading, Jeff Bishop Review, Jeff Bishop Weekly Money Multiplier, Jeff Bishop Weekly Money Multiplier Review, Jeff Bishop's Option Profit Nexus, Jeff Bishop's Option Profit Nexus Review, Jeff Bishop's Option Profit Nexus Reviews, Jeff Bishop's Option Profit Nexus Scam, Jeff Bishop's Options Guide to Riches Ebook, Jeff Bishop's Total Alpha Trading, Jeff Bishop's Total Alpha Trading Review, Jeff Bishop's Total Alpha Trading Reviews, Jeff Bishop's Total Alpha Trading Scam, learn to trade options, markets, NASDAQ, Nathan Bear form Weekly Money Multiplier, Nathan Bear form Weekly Money Multiplier Picks, Nathan Bear form Weekly Money Multiplier Review, Nathan Bear form Weekly Money Multiplier Reviews, Nathan Bear form Weekly Money Multiplier Scam, Option Profit Nexus, Option Profit Nexus Login, Option Profit Nexus Results, Option Profit Nexus Review, Option Profit Nexus Reviews, Option Profit Nexus Scam, Option Profit Nexus Website, Option Rocket, Option Rocket Complaints, Option Rocket Fraud, Option Rocket Kyle Dennis, Option Rocket Login, Option Rocket Price, Option Rocket Real User Review, Option Rocket Refund, Option Rocket Review, Option Rocket Reviews, Option Rocket Scam, Option Rocket StockGumshoe, Option Rocket Trial, Option Rocket Website, option trading, option trading strategy, options, Options Guide to Riches, Options Guide to Riches Free, Options Rocket Kyle Dennis, Options Rocket login, Options Rocket Review, Options Rocket Reviews, Options Rocket Scam, Options Rocket User experience, Options Rocket user review, Options Rocket webinar, Options Rocket website, options trading, options trading newsletter, options trading strategies, options trading tips, options trading webinar, Options Vortex, Options Vortex Complaints, Options Vortex Fraud, Options Vortex Login, Options Vortex Performance, Options Vortex Program, Options Vortex Refund, Options Vortex Results, Options Vortex Review, Options Vortex Reviews, Options Vortex Scam, Options Vortex StockGumshoe, Options Vortex Website, Options War Room, Options War Room Price, Options War Room Review, Options War Room Reviews, Options War Room Scam, Options War Room Schedule, Options War RoomRefund, RagingBull Options Vortex, RagingBull Options Vortex Review, RagingBull Options Vortex Reviews, RagingBull Options Vortex Scam, Russell, S&P, SPX, SPY, squeeze, strategies, Total Alpha Trading, Total Alpha Trading Review, Total Alpha Trading Reviews, Total Alpha Trading Scam, Total Alpha Training, Total Alpha Training Live webinar, trading, understanding options trading, VIX, Weekly Money Multiplier, Weekly Money Multiplier Alert, Weekly Money Multiplier Complaints, Weekly Money Multiplier Discount, Weekly Money Multiplier Fraud, Weekly Money Multiplier login, Weekly Money Multiplier Real User Review, Weekly Money Multiplier Refund, Weekly Money Multiplier Review, Weekly Money Multiplier Reviews, Weekly Money Multiplier Scam, Weekly Money Multiplier Stockgumshoe, Weekly Money Multiplier User Experience, Weekly Money Multiplier Website, WMM, WMM Alert

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