Saywell: Market May Have Gone a Bit Too Far on Fed

The video discusses the potential for a Fed rate hike in June, with market expectations shifting from a 4% to a 34% chance. The speaker argues that the market may be overestimating this likelihood due to data dependency, internal Fed opinions, and external factors like the Brexit referendum. The Fed's communication aims to adjust market risk perceptions. Additionally, the impact of dollar strength on global economies, particularly emerging markets, is explored, highlighting the feedback loop where a stronger dollar could reduce the need for a Fed rate hike.

What was the initial market perception of the Fed rate hike probability in June?

• 50%

• 10%

• 4%

• 34%

Which factor is NOT mentioned as influencing the Fed's decision to hike rates?

• Political pressure

• Feedback loop with the dollar

• Majority of the Fed's inclination

• Data dependency

Why might the Fed want the market to price in more risk?

• To stabilize the dollar

• To prepare for a potential rate hike

• To increase market volatility

• To influence global trade

What is a potential consequence of a strengthening dollar on emerging markets?

• Currency depreciation

• Higher inflation

• Economic growth

• Increased exports

How does a rising dollar affect the Fed's pressure to hike rates?

• Causes immediate rate hikes

• Decreases pressure

• Increases pressure

• Has no effect