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On September 22, Federal Reserve Chairman Mohamed Mussaleem stated on Monday that the Fed may need to further raise interest rates to curb inflation due to strong demand and the impact of commodity prices extending beyond the oil sector. He emphasized that the Fed should act sooner rather than later. Mussaleem stated, “Persistent demand and recurring supply pressures continue to exacerbate inflation risks. I believe that without further policy measures to curb inflation, it is likely that in 18 months, inflation will be significantly higher than our 2% target, rather than reaching it. I believe policy must impose meaningful constraints on inflation. This would allow the Fed to achieve its inflation target in about a year and a half, thus allowing time for tightening to have an impact on the economy.” He added, “Earlier, gradual tightening is more appropriate and less shocking to the economy than later, larger, and potentially more abrupt policy moves.” Mussaleem pointed out that inflation “is not a risk; it already exists,” and even after excluding the effects of oil and other supply-related factors, the underlying inflation rate could still be several percentage points higher than the Fed’s target and is “heading in the wrong direction.”As of the 2:30 closing bell, the main Shanghai gold futures contract fell 0.39%, the main Shanghai silver futures contract fell 0.70%, and the main SC crude oil futures contract fell 2.26%.Federal Reserves Mussalim: Business contacts indicated they plan to raise prices to "close to 3%".Federal Reserve Chairman Mossallem: Rate hikes are best done "earlier and gradually," rather than "delayed and drastic."Federal Reserves Mussalim: The labor market remains stable near full employment and is not a source of inflationary pressures.

S&P 500 Continues to Threaten Resistance

Alice Wang

Aug 04, 2022 15:09

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Wednesday's trading session saw a little increase in the S&P 500 as we once again ran into resistance.

Technical Analysis of the S&P 500

As it seems that we are about to challenge a significant region of resistance, the S&P 500 has increased somewhat throughout the trading session on Wednesday. In the end, I believe that this market will face considerable pressure over time, and I do not believe that a meaningful breakthrough will occur until we break over the 4200 level. This appears highly unlikely to occur in the near future because Friday is when the employment report is due.


There is a lot of technical evidence to suggest that we could halt here, but keep in mind that the 200 Day EMA is situated just below the 4200 level. I believe we will go for the 4300 level above, which is another region of resistance, if we can break over 4200. If we break above that level, I believe the trend has fully shifted, and the S&P 500 soars as if nothing ever went wrong.


Much of this is predicated on the hypothesis that the Federal Reserve may need to change course soon as a result of the economy's performance. That, however, ignores the fact that inflation, although somewhat reducing, is still very high. Since it is without a doubt one of their top worries, it will naturally take center stage. It will be considerably worse if inflation starts to increase. While Wall Street tries to persuade itself that the Federal Reserve will shield it, the truth is that there may not be much of an option for the Federal Reserve other than to keep tightening moving ahead.

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