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Fed's hawkish tone and its ripple effect
The latest hawkish statements from various Fed members this week are certainly keeping the market on edge, especially concerning the pace of future rate hikes. It feels like the narrative is shifting again, with the focus back on inflation being stickier than anticipated, which naturally makes me reconsider my outlook on anything interest-rate sensitive. I'm keeping a close eye on how this plays out, particularly with emerging market currencies like $USDTHB, as stronger dollar sentiment could put further pressure there, even as crypto assets like $AAVE attempt to find some stability. It's a challenging environment to navigate with so many conflicting signals.
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I'm seeing similar concerns. The market seems to be pricing in a higher terminal rate, and it will be interesting to see if any data points between now and the next FOMC meeting provide a counter-narrative, or if this hawkish sentiment solidifies further.