Hi all...

Today the most awaited meeting of the year took place, the meeting that could make the markets fall or lift. Although I was very aware of the price of bitcoin to avoid any loss in the crypto market, the truth was that it behaved very well and remained relatively stable even though at times it seemed that everything was going to indicate a super bearish trend.

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What was most expected from this meeting was the announcement on interest rates, since if there was an immediate rise, it meant that the market would enter a massive liquidation again.

But to my surprise or everyone's surprise, there was an announcement that we were already waiting for something like a little caress before the devastating blow and what was revealed is that the really important announcements will come in March, only announcements were made regarding different things such as not only would there be a single rise in interest rates but there would be several throughout this year, in addition to the issue of accumulated inflation in December of last year, which was the highest recorded in 40 years and information important on government bonds.

But in the question and answer section that they did to Jerome Powell, they did have some small drops, as his answers were very vague which scared investors.

The first question that they asked Jerome Powell that scared the market was regarding the growth rate of 2022 since the FED president himself mentioned that the growth for this year will be very low compared to what they had thought in December that would happen. This affects as it fills investors looking for medium-term objectives in 2022 with fear.

The second question was about inflation since Jerome Powell mentioned that inflation is worse than they estimated and that they also expect inflation to continue to grow for 2022, so they would continue to see a rise in prices that would continue to affect the consumers and supply chains.

The third question was about the supply chains since Jerome Powell accepted that the problems related to the different supply chains will improve in 2022, rather due to the pandemic and the waves of variants, they would make the supply chains and the better economy from 2023 or 2024.

The fourth question was about the rise in interest rates since investors expected them to rise by 0.25% but Jerome Powell's answer was filled with uncertainty since he mentioned that the Fed had not yet reached an agreement on what the increase would be, so it is most likely that in March we will see a violent increase in interest rates by 0.5% and possibly more increases throughout the year.

And finally, we talked about the FED Balance Sheet, as we know when the FED lowers the number of assets it has on the balance sheet it means that it is sucking money out of the economy, which in the long run does not benefit anyone. But Powell himself mentioned that this reduction would not begin until interest rate increases were seen, so the most likely thing is that we will see the reduction between March and May.

Conclusion

The FED and this conference with its president brought us comments that many of us expected about the fact that the US economy is in a process of aggravated crisis and that it is worse than what the experts calculate, that the economy will not grow this year due to the pandemic and the ravages in the economy and possibly we will see the conflict with Russia also affect the market and the economy.

For now, the waters are calm, but we will have to wait for the meeting in March and see what the plans are in terms of the balance sheet and what will be the definitive percentage for the rise in interest rates.

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