The Traveling Trader Warns That The Feds Can’t Keep Doing This

The Feds have kept interest rates static in Jerome Powell’s latest quarterly announcement. In this article The Traveling Trader discusses what this means for investors and how to best Hedge their portfolios in these uncertain times. The Traveling Trader shares his investment ideas with his ever-growing YouTube following and 4,000 strong Patreon Community members, providing them with quality content surrounding trading strategies and market trends. 

The Traveling Trader explains the three main monetary policies that are being adopted by the Feds to control rising inflation. The first policy is Tapering, which is the reduction in the assets being purchased by the Feds, such as treasuries and mortgage-backed securities. The purchase of these assets will taper off completely by March 2022. The second brake for controlling inflation is through interest rate hikes. Many financial experts were expecting a rate hike in Jerome Powell’s latest announcement, but The Feds kept rates the same – with no exact timing of when they will begin to climb and by how much. According to the Traveling Trader this has caused major uncertainty in the markets and has played a part in stock price volatility that is still present. The third policy for the Feds to combat inflation pertains to the Balance Sheet. This relates to whether they will let assets purchased run-off and mature or if they will actively start to sell these assets off. The very fact that no guidance was provided for when these assets will begin to be sold off The Traveling Trader states adds even more market uncertainty.  

You only have to take a quick glance at the VIX, the volatility index that shows the stock markets fear range based on S&P 500 to witness just how volatile and fearful the markets are at this present time The Traveling Trader comments – January 2022 being one of, if not the worst on record for the S&P 500.

The Traveling Trader believes that one of the best Hedge strategies for positioning portfolios right now is in buying high-quality Blue-chip stocks, such as Microsoft, Amazon, McDonalds etc. as they are trading at undervalued prices. This is something that he himself has taken advantage of by purchasing Microsoft at a very favorable price. He also indicates that cash can also be a temporary Hedge mechanism, but not to wait too long before choosing an investment vehicle for it.  He encourages all investors to trade according to their own risk tolerance. For those seeking more in-depth Hedging strategies it could prove beneficial to take a look at The Traveling Trader’s Discord Group where he shares Puts and Options ideas that are designed to help enhance the portfolios of his 4,000+ members.   

To receive more information on this topic you can view The Traveling Traders YouTube video here:

The Traveling Trader encourages investors to complete their own due diligence before making any trades and states that this information is meant for educational purposes only, he is not a financial advisor.

For more Stock Market updates you can connect with The Traveling Trader here:

The Traveling Trader

Michael Fraser

Founder & Editor-In-Chief of Entrepreneur Mogul
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