With the latest FED decision to further increase the interest rates as well as their clear signal to continue moving forward, the markets definitely reacted to it not in a happy way. After the latest interest rate pause, everyone expected the FED to pivot but they raised the stakes again. The question now is whether the markets will call the FED’s bluff or if the FED finally gets what it wanted: a recession. In this post, I wanted to talk about the current situation and how it could affecting people on different levels. Furthermore, I wanted to touch base on some options for us as investors to overcome the current problems. With that being said, let’s take a look at the current situation.
Current Situation Is Critical
First things first, the markets did not like the message that the FED tried to bring across: “We are not planning to decrease the interest rates any time soon”. This lead to a 2% down fall in the S&P and other markets followed. But is this really the way it is going to go? There are some voices around that the FED did not like the reaction to their hike pause which is why they needed to send out a message. On the other hand, inflation is still not under control. The question is now: Will the FED really try to do everything, even it means to crash the economy or is this all a big bold bluff?
I think that not only the financial markets are affected by it. Yes the banks are getting hit hard and there might be a few more bank failures along the way, but I am also considering the housing market here. It is interesting to see that despite higher interest rates, the housing market is not really going down too much. The reason is that the supply of new built houses as well as the sold houses is not really growing. Many people are happy in the current homes and are probably not willing to leave their home. On the other hand, there could be a wave of foreclosures coming in because current homebuyers are buying homes that they can not afford and are speculating on falling interest rates in the future in order to re-finance. I am not a real estate expert but it sounds like a risky business to trust the FED to reduce the interest rates any time soon.
Last but not least, what about crypto? While the latest spike in BTC prices created some optimism, the whole industry is still in a bear market. I think we could all agree on that. Nevertheless, I don’t think there is time for depression here. Everyone I am talking to is very optimistic about this space, but this could be also because I am surrounded by crypto optimists like myself. I must admit though that projects like Hive are giving me a very good feeling going into the future. BTC itself is also something I am very optimistic about, since it is always smart to have your eggs in different basket. Once we are in a bull market again, it could create a lot more millionaires once again. The only question is whether it will be a few months or several years from now.
It Is Not Looking To Become Easier!
I am certain that the times will get better again, but until then it is a hard period to overcome. I am preparing myself for another year or two of investment opportunities while trying to keep my finances under control. Saying that, food, gas and shelter prices are definitely not going down any time soon. The only chance to fight it is to get higher paying jobs or start getting more jobs which I am definitely considering at the moment.
Options & Strategy?
With that being said, I think that there are more strategies out there to become successful. I still think that dividend investing is a very solid way to go forward. Yes it is surely not the fastest one but it gives you some sense of achievement to see the your money working for you. I also think that Hive offers a great opportunity on increasing your wealth. Me personally, I like writing about stuff that I enjoy which is why my feed is mostly about Splinterlands, but occasionally I write about sports and finance as well. Not only does it give me a balance in life but it is also helping me financially. Last but not least, there are several Side hustles I want to try over the period of the next months. By the end of the year I am planning to write some reviews about them as well, so keep checking in! 😊
Published by ga38jem on
LeoFinance
On 6th August 2023