Probability of Fed Rate Hike Rises to 90% on Core Price Increase

The rise in the probability of a Fed rate hike to 90% due to core price increases could create short-term pressure on risk assets. The SPX has fallen 0.86% in the last 24 hours to 7651, trading below its 50-day moving average (7669), confirming a weak technical picture. The RSI is at 51.5, in neutral territory, but the MACD is negative and below its signal line, indicating continued downward momentum. Valuation pressure may increase with rate hike expectations, and the index could pull back toward its 20-day average (7636). However, the news may already be priced in; therefore, while the direction is downward, confidence should be kept at a moderate level.

The increase in core price inflation has raised the probability of a Fed rate hike to 90%, heightening downside risk for NDX in the short term. Technical indicators are already weak: the price is below the 20-day and 50-day simple moving averages, MACD is negative and below the signal line, and RSI is neutral. Expectations of a rate hike could put pressure on growth stocks. However, the news may already be priced in; therefore, I anticipate a moderate downward trend rather than a definite decline. In the 1-3 day horizon, fluctuation between 29,000 and 29,500 is expected.

The increase in core price growth has raised the probability of a Fed rate hike to 90%, which is supportive news for the DXY in the short term. However, technical indicators are giving mixed signals: RSI is neutral around 50, MACD is below the signal line, and the price is slightly below the SMA20. The 0.13% increase in the last 24 hours has been limited. With the impact of the news, an upward movement in the DXY can be expected, but due to the current technical weakness, there is a risk that the rise may be limited. Nevertheless, since the rate hike expectation is a strong catalyst, the direction is considered upward.

The increased probability of a Fed rate hike to 90% could create downward pressure on gold prices in the short term. However, GLD's last close was 4375.02, up 1.35% in 24 hours, and the RSI is at 48.5, in neutral territory. The MACD is just below the signal line, indicating weak downward momentum. Although the news strengthens rate hike expectations, the market may have already priced it in; therefore, the impact may be limited. Nevertheless, selling pressure could be seen in the short term.