Rising Interest Rate Environment

 This is the third consecutive hike of the Fed Funds Rate by 75bp, bring rates to 3% now.

Singapore will soon follow.

With the dot plot predicting the Fed Funds Rate to be around 4-4.5%, we should expect more rate hikes in the next two quarters.

Where does that leave us?

The stock market is tanking really badly, USD is so strong against everything, meaning bye bye gold and crypto.

Best bets are treasuries and fixed deposits.

Clear whatever loan you can too.

Small DCAs into equity portfolios.

Save cash next six months so that you can:

A) further pay up any loans where interest rates are going up too quickly

B) place into fixed deposits yielding >4%

C) buy equities on the cheap

The S&P 500 is testing the June 2022 lows near 3600. From its all time high in Jan 2022 of 4800, that has been a huge nine month drop. Once 3600 breaks, we could even see 2900 and below.

Will it rebound?

Not likely as the fundamentals have not changed. Interest rates are still rising, inflation is still too high, there is quantitative tightening going on, and the economy has not felt the full brunt of many of the recent measures yet.

Stay safe out there.