In our March 2nd article, we discussed about a possible Fed stance towards inflation. Just yesterday, Fed Chairman Powell has hinted that the Fed is likely to increase the rate ceiling to possibly 6% or more.
This statement jolted stock markets as traders and investors brace themselves for more economic headwinds. Indeed, taming inflation has become a very difficult endeavour. It is like trying to tame a beast that has no fear of any weaponry launched at it. Taming the inflation “beast” has become pretty archaic as it seems the only weapon at the Fed’s disposal is just hiking interest rates.
As Powell’s statements whipsaw the markets, traders should start to adjust their near term trading objectives to be contented with small consistent profits. The key balancing act is to tame inflation without causing a hard landing or a really bad recession that would set back the economy by another one to two years. However, between that and social upheaval, the choice is pretty clear.
We believe technology stocks will continue to trade on the upside as the advent of Artificial Intelligence will create a strong wave that lifts all boats. Traders who are not sure which tech stocks to play can consider tech ETFs like the NASDAQ-100 Index ETF – TQQQ.
Using a stock trading bot to trade TQQQ would be ideal as traders can setup the bot to scalp on consistent small profits.
We believe the next several months will be critical in defining whether we will enter into a confirmed recessionary period or we can emerge the victor in taming the inflation beast.
Disclaimer: The above article is not an investment advice. Traders and investors are advised to seek their own independent professional financial advisors for any trading or investment decisions.