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January 31, 2023 | Irrationally Exuberant January Comes to a Close

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

The US Fed’s next rate announcement is due on Wednesday, and the consensus expects a 25 basis points (bps) increase, raising base rates in the banking system to 4.25 to 4.75% from 0 to .25% one year ago. Lest anyone forget, the Fed is also reducing assets on its balance sheet (QT) by $95 billion monthly (equivalent to a further 200bps of tightening annualized).

Meanwhile, this month, irrational exuberance in risk markets is acting as if nearing the end of rate hikes is an all-clear signal. In reality, the record tightening to date will be slowing the economy over the next year at least, and the average time from the pause to a stock market low is 16 months with a 24% loss.

A worthwhile update is offered in this segment.

Danielle DiMartino Booth, CEO & Chief Strategist at Quill Intelligence, discusses the Federal Reserve’s latest moves, inflation, the debt ceiling, and Fed reform with David Lin, Anchor and Producer at Kitco News. Here is a direct video link.

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January 31st, 2023

Posted In: Juggling Dynamite

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