Ross Gerberthe co-founder of Gerber Kawasaki wealth and investment management and a celebrity Tesla Inc. TSLA Taurus believes any change in the that of the US Federal Reserve monetary policy will lead to a stock rally.
What happened: Gerber attributed his belief to the market already pricing in a recession and a 2% drop in earnings. “However, the actions of the Fed make it difficult to be bullish at this time,” Gerber tweeted.
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“The bottom line is that the US economy is still pretty strong and the best game in the world. China and Germany are in recession and it is crucial for the Fed to ensure growth as inflation is clearly moderating. Albeit slowly,” he said.
risk mistakes: Gerber said the Fed needs to stop and watch or risk making a mistake as there is a 6 to 12 month lag for policy impact to be reflected on the economy.
“It should be interesting in November. Choice. Softer Numbers. Simpler compositions. When does the Fed blink? Because if they screw up America. You will be solely to blame,” Gerber tweeted.
Why it matters: Market experts call for dovish monetary policy action as aggressive Fed policy has rocked stocks, bonds and commodities.
That SPDR S&P 500 ETF Trust SPY has lost over 25% since the beginning of 2022, while the vanguard Total Bond Market Index Fund ETF BND has lost over 16% over the same period.
Hawkishness Galore: The central bank seems undaunted in its task of curbing inflation. With just two weeks before his policy decision, Minneapolis Fed President Neel Kashkari allegedly said Pausing the rate hike campaign would not make sense if inflation continues to rise.
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