The Fed’s “Last Kiss”

[Trading With Larry Benedict]( The Fed’s “Last Kiss” By Eric Shamilov, analyst, Trading With Larry Benedict Wednesday’s rate decision was highly anticipated… And completely uneventful. The Federal Reserve offered nothing new that the market didn’t already know. There was the 25-basis-point rate hike, which brought the fed funds rate up to 5.053%. May fed fund swaps that expired after the announcement had the implied rate at that level since November. The only real uncertainty from the market regarding Wednesday’s unanimously supported rate hike from the Fed took place in the few days after the Silicon Valley Bank collapse in early March… then quickly went right back to pricing in a fed funds rate above 5%, as you can see from the chart below… Then there was the path of future rate hikes… with Fed Chairman Jerome Powell officially opening the door for a pause by saying the committee is pivoting to making decisions on a meeting-by-meeting basis… That too was already known by all… as you can see from the chart below, which shows the market already pricing in a pause for the upcoming June meeting and eventual rate cuts in the second half of the year… Recommended Link [My #1 trade for May]( [image]( “I’m going to show you a retirement method that’s unlike anything you’ve ever seen. It has nothing to do with “buy and hold.” In fact, it has nothing to do with any “traditional” investments, like stocks and bonds. In short: it’s a way to trade one unique type of investment over and over again… and potentially make all the money you need to fund your retirement. I call it the “One-Trade Retirement Blueprint.” And it’s a dream come true for folks at or near retirement.” – Jeff Clark [Get the details here – including the name of the ticker that makes this all possible.]( -- This chart was a snapshot of the implied rate for every Federal Open Market Committee (FOMC) meeting until January 2024. It’s from May 2… one day before the FOMC rate decision. As usual, the market knows what the Fed will do before it does it. Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. On the surface, the potential for a dovish Fed pivot should have sent stock prices to new year-to-date highs… Except they fell, leading me to believe that the Fed pivot that’s now obvious to all has already been priced in. Today… As the banking crisis grows, that implied rate curve now looks like this… It’s showing not just a pause, but a U-turn… With five rate cuts priced in by January, which would bring the fed funds rate down by 125 basis points to 3.8%. Alex Gurevich, CIO of HonTe, said it as eloquently as I’ve heard back in 2018… We’re probably seeing this play out now as well… Because what the market hasn’t priced in is how it fell hard for the very false narrative that Silicon Valley Bank and Signature Bank were just isolated incidents… bank failures that occurred as a result of excess risk taking and a duration mismatch on their balance sheets, not a systemic problem. Then came Credit Suisse… The market didn’t care. Then came First Republic Bank… The market was mesmerized by Microsoft’s and Meta’s earnings. Now comes Western Alliance, PacWest, and First Horizon… Regional banking problems are mushrooming. And if this does turn out to be like the “last kiss”… with the Fed cutting rates earlier than Jerome Powell was thinking about… It won’t be for reasons the market will like. Twelve-month Treasury bills are still trading at 4.37%... So you’d better grab yield while you can. Regards, Eric Shamilov Analyst, Trading With Larry Benedict IN CASE YOU MISSED IT… [“Shadow CIA” Insider Releases Tell-All Book on the End of the World]( This is how the world will end. According to best-selling author, Peter Zeihan, massive changes are brewing which could turn the world as we know it – and the financial markets – upside down. His latest prediction is so important… We’ve reached out to him and secured a copy of his latest book for you, at a huge discount. For details on what he’s predicting now – and how to claim your discounted hardback copy… [Click here.]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2023 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. 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