Bessent Defends Fed's Shift, Claiming Markets Are 'Detoxing' from Excess Guidance

Bessent made a statement at the latest Washington meeting questioning the necessity of a Fed rate hike, signaling a 'detox' process in the markets.

Fed's New Surprise: The 'Detox' Wave in Markets

The Fed's decision to maintain a $5.25% rate in 2024 has been interpreted as a signal to avoid excessive guidance.

Bessent's Defense: Reevaluating the Need for a Rate Hike

Bessent emphasized that the Fed's $1.5 trillion policy package is reshaping market dynamics.

Market Turbulence: Investor Confidence and Expectations

■NASDAQ closed down 0.8%, while Dow Jones rose 1.2%.

■Investors are projecting Fed's future moves toward 2025, amid uncertainty.

■European markets saw fluctuations at EUR/USD 1.07.

Strategic Solution: Fed's Direction and Work Area

■The Fed plans at least one rate hike in 2024.

■The central bank will focus on balancing inflation around the 2% target.

■Market participants will closely monitor policy changes through 2025.

Outlook: 2025 Rate Policy

■Economic growth is expected to stay around 1.5%.

■The risk of inflation exceeding the 2% target is low, but will be monitored.

■Investors are advised to adjust risk tolerance and review long-term strategies.

This new 'detox' process in the markets suggests that Fed guidance has been excessive. For investors, revisiting risk management and long‑term strategies is critical.