The Fed Meeting is Today... What to Expect?

For our beach investors… drink a Tinto de Verano and get paid. 1M today could be around an extra 50k in one year with less risk than trading.

These are the best rates you can find in the fixed-income markets:

• C.D.s (New Issues): 5.40% (1-year term)

• U.S. Treasury Bonds: 5.34% (6-month period)

• U.S. Treasury Zeros: 5.14% (9-month period)

• Agency/GSE: 5.86% (5-year period)

• Corporate (Aaa/AAA): 5.57% (10-year term)

• Corporate (Aa/AA): 5.64% (1-year term)

• Corporate (A/A): 6.80% (10-year term)

• Corporate (Baa/BBB): 9.03% (3-year period)

• Municipal (Aaa/AAA): 4.32% (5 and 20-year terms)

• Municipal (Aa/AA): 4.58% (20-year term)

• Municipal (A/A): 4.79% (30-year period)

• Taxable Municipal: 5.68% (1-year period)

For our street investors… face the wall with A.I. sentiment analysis and adjust your trading for Today (June 14, 2023):

Anticipated Fed pause indicates low probability of rate hike, reflecting the market's 95% confidence in maintaining the current 5% to 5.25% rate range. SPY may respond positively, alongside the Nasdaq, as demonstrated by futures data. Investors viewing the pause as a sign of slowing economic headwinds could bolster market sentiment. Conversely, the hawkish possibility of continued rate increases could stir volatility, negatively impacting SPY, which could retreat from recent 13-month highs.

The weakened dollar may benefit multinational US companies due to increased competitiveness of their products, but these gains could be offset if there's a retraction in the hawkish stance, bolstering the USD. Depending on Powell's comments, VIX may swing dramatically, reflecting the market's uncertain response to potential changes in future rate paths.

Energy sector should remain under close watch; crude oil prices are on the rise due to the anticipated rate hold and China's potential stimulus package. Inflation pressure relief, resulting from the expected Fed pause, combined with the impact of Saudi oil price cuts could lead to a tightening oil market, supporting energy companies.

Tech stocks, notably AMD, might see a bullish reaction considering Amazon's consideration to use its AI chips. However, UnitedHealth's forecast of spiking medical costs for Q2 indicates a potentially bearish outlook for the health sector.

Implications for other currency pairs are critical; EUR-USD and GBP-USD are appreciating while USD-JPY and USD-CAD are depreciating. Any deviation from the Fed's expected course could send ripples across forex markets. The European Central Bank and Bank of Japan's upcoming meetings may further influence these pairs.

In essence, expect high market sensitivity towards the FOMC statement and Powell's comments. The market direction hinges on any indication of future rate hikes or cuts, with the potential for high volatility if the Fed deviates from the anticipated pause.