In This Economy?

A Traders Guide to the Federal Reserve

| May 30, 2023
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    In This Economy?

    A Traders Guide to the Federal Reserve

    May 30, 2023
    The Federal Reserve (or Fed) is the US central bank that can affect the money supply in times of either fast or slow economies to help normalize them from those extremes. The Fed's main activity is changing interest rates, including hikes or cuts to interest rates that can promote economic contraction or expansion, respectively. Frank highlights the different symptoms of fast and slow economies before showing how traders can watch the Fed's activity to help with their stock and bond trading. Find out how traders tend to interpret the Federal Reserve and create your own strategy for trading the Fed.

    The Canadian dollar's value relative to the US dollar and crude oil prices have been declining in recent trade. The correlation between CAD and crude oil energy prices has been historically significant, and traders of one might find trends in the other helpful. Frank shows the correlation between USD/CAD and crude oil using price charts in both before speaking to where these markets could go in the future if correlations hold up. Finally, he shows the current sentiment for the major forex pair USD/CAD to be around 57% short.

    Today's Outliers segment hinges on the 20-year highs for T-bill yields. Frank shows how 1-month yields from the US Treasury have climbed to 6% in recent trade as the chances of a default from the US Treasury if the debt ceiling is not raised have increased.

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