The key US stock market indices - Dow Jones, NASDAQ, and S&P 500 - are recovering rapidly. Over the past two days, all three have grown quite well, but, as they say, what we saw at the beginning of 2022, these are just flowers. Recall that the absolute majority of experts believe that the current year will be very difficult for the stock market (as well as for other risky markets) because the Fed intends to raise the key rate several times and completely abandon monetary stimulus. The question now is as follows: how many times will the rate be raised in 2022? Most experts, banks, and analytical companies agree at least 4 times. However, some are confident that there will be from 5 to 7 increases. In addition, the Fed may start unloading its balance sheet in the summer, which means, in fact, the withdrawal of excess money from the economy. And most importantly, all of the above remains at this time only the plans of the American regulator. It has never raised the key rate yet and continues to pump up the American economy with money. In February, the Fed will buy $ 30 billion worth of mortgage and treasury bonds. Thus, by and large, there has not been a single tightening of monetary policy in the States yet. There was only a weakening of the incentive. Therefore, in reality, stock indices do not yet have grounds for a serious fall. But they will certainly appear if the Federal Reserve does not radically change the vector of monetary policy for 2022.
What follows from this? It follows from this that the worst for the stock market is likely yet to come. At this time, the key indices may recover, but the shares of many high-tech companies, as well as the shares of companies that have shown the greatest growth over the past two years, have already begun to adjust seriously. In the indices, these falls are not too visible, because the shares of some companies continue to grow. For example, now is a good time to restore the shares of companies in the fields of tourism, transportation, and all those most affected by the pandemic. However, as monetary policy tightens, shares of all companies will be under pressure to one degree or another. Bank deposits are already expected to grow in the United States. Why? Yes, because the deposit rate will also rise after the credit rate, and inflation will decrease over time. Deposits are the safest investment tool (although it is better to say "saving the value of money"). Therefore, the demand for low-risk assets will grow and there will be a flow of capital from risky to low-risk assets. Bitcoin and its "brothers" are already experiencing this flow.
