Technical Analysis

CNBC Survey: Expect 50 bps this week and another 75 BP next year

The CNBC investor survey shows the Fed is likely to continue to tighen but the worst is mosly behind us:

  • 50 bps hike next week
  • Additional 75 basis points in 2023

Although the Fed is expected to increase rates, the survey shows that the S&P is expected to rise in 2023 and 2024

  • Current at 3934
  • End of 2023 at 4044
  • End of 2024 at 4418 (+12.3% from currently levels)

Chance of the S&P increasing/decreasing 10% from current levels

  • Increase up to 51%
  • Decrease 35%
  • Risk reward -16%

It was at 43% for both increase and decrease in June 2022.

As far as rates, the 10 year yield outlook shows:

  • 3.58% current
  • 3.67% at the end of 2023
  • 3.60% in 2024

Finally, 91% believe inflation has peaked with 6% saying it has not.

The Fed will announce their interest rate decision on Wednesday at 2 PM. The expectations are for 50 basis points (absent a surprise in the CPI data tomorrow).

That would put the Fed target at 4.25% to 4.5%. The dot plot at the end of September meeting showed a terminal rate at 4.6%. That will go higher this month

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