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Selloff only half-done - final leg in 2019: Morgan Stanley strategist


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#21 dTraderB

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Posted 28 November 2018 - 03:33 PM

Apparently, there was an attempt to walk back some of the dovishness but the bulls seem energized so markets could rally into the weekend G20 trade talks.



#22 Data

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Posted 28 November 2018 - 03:34 PM

There is a wide range of interest rates that are considered neutral, generally tied to the growth rate in the nominal gross domestic product.  It probably runs from 3 to 4.5 percent.  Three more hikes would be in that range.  He referred to a range of estimates by outside sources.  It is all subject to interpretation.  What are the estimates and how far is just below the range?



#23 dTraderB

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Posted 28 November 2018 - 03:39 PM

Powell's timing was perfect:

he waited until the markets were off the low and then dropped a dovish bone that was devoured by the bulls!

 

He was also under intense pressure not on ly from Trump but from many powerful Wall St firms to back off  - not the interest rate hike but to inject 

an element of dovishness into his comments. He did that. 

 

In terms of substance and actual change in policy it wasn't really that much but it was a powerful catalyst for a market that was not confident to move higher.