2023 Grand Finale: Will the Fed's rate stay put or reach a turning point?
Hi, mooers! ![]()
The final Federal Open Market Committee (FOMC) meeting of 2023 is approaching. In previous meetings, the Fed raised interest rates 11 times after inflation soared to levels not seen since the early 1980s. The policy rate reached its highest level in 22 years, with a target range between 5.25%–5.5%.
Many investors believe that the Federal Reserve's rate hike cycle is nearing its end. "The Fed is on hold for now but their pivot to rate cuts is getting closer," said Bill Adams, chief economist at Comerica Bank. "Inflation is clearly slowing, and the job market is softening faster than expected."
However, Federal Reserve Chairman Jerome Powell pushed back on market expectations for aggressive interest rate cuts ahead, calling it too early to declare victory over inflation. He stated, "It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease."
The next Federal Open Market Committee (FOMC) meeting is scheduled for Dec 12–13, 2023. Do you believe that the Fed's rate hike cycle has concluded? Is it possible for interest rates to be lowered in the upcoming Q1 quarter?![]()
With uncertainty surrounding the future direction of the Fed Rates, it's not surprising that many investors are choosing to use money market funds as a way of managing their excess cash. The Investment Company Institute has reported that individuals and institutions have invested a total of $5.84 trillion into money market mutual funds, as of Nov 29.
With the current cycle of interest rate hikes continuing, money market funds have been generating higher yields consistently. Over the previous year, the $CSOP USD Money Market Fund(SGXZ96797238.MF)$ has maintained a seven-day annualized rate of over 4.6%, while the $Fullerton SGD Cash Fund(SG9999005961.MF)$ has provided a seven-day annualized rate of over 3.6%.
Many mooers have shared their views that money market funds can provide a comparatively competitive return with liquidity and diversification compared to deposit rates or money market rates. Moreover, investors can benefit from important investment opportunities during an upswing in the market. ![]()
@ cola1010
Money Market Funds appear to be a more steady and rewarding option due to their lower risk and consistent returns. $Fullerton SGD Cash Fund(SG9999005961.MF)$ and $CSOP USD Money Market Fund(SGXZ96797238.MF)$ are recommended for a stable investing plan in 2024, amidst economic concerns and anticipated market reactions to Federal Reserve actions.
@ Dadacai
have also placed my idle cash in $Fullerton SGD Cash Fund(SG9999005961.MF)$ to give me steady returns comparable to fixed deposits with relatively low risk and the flexibility to trade if I wish to.
What's more, Cash Plus has made an upgrade! The Fullerton SGD Liquidity Fund, our first SGD T+0 money market fund, was launched solely for Singaporean investors on Dec 1, 2023. With same-day settlement and unrestricted redemption options, you can enjoy competitive returns every single day while enjoying remarkable flexibility.
Would you consider investing in our newly launched Fullerton SGD Liquidity Fund? Tap here to learn more about our newly launched fund>>
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Have you invested in Moomoo Cash Plus? Which particular fund has had the most positive impact on your portfolio in 2023? Share your insights and win rewards!
1. Do you believe that the Fed's rate hike cycle has concluded? Is it possible for interest rates to be lowered in the upcoming Q1 quarter?
2. With a potential change in the Fed Rate, are you changing your investment strategy? What adjustments will you make for next year?
3. Do you have a positive outlook on money market funds? Have you invested in Moomoo Cash Plus? Which particular fund has had the most positive impact on your portfolio in 2023?
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2023/12/11 - 2023/12/25
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撒花 : 1. I think Fed's rate hike cycle will be eased next year provided market data supports so. Unlikely for interest rates to be lowered in the upcoming Q1 quarter.
2. With a potential change in the Fed Rate, I will adjust my investment strategy accordingly, more titled towards equity market as more upwards expected.
3. Yes definitely still holding positive outlook on money market funds given its stable return and liquidity. Not bad as an emergency fund. I like the # Fullerton money fund that I am holding.
mr_cashcow : 1. For now it seems the dust have settled maintaining at the current level and quite possibly slowly easing as we proceed along to late 2024
$Fullerton SGD Cash Fund (SG9999005961.MF)$ definitely have a big positive impact partly because of the 5.8% promotion that really makes it a no brainer to park my idle cash in while waiting for the moolah to roll in, my sweet spot for that risk reward ratio
2. Currently still sticking to $Fullerton SGD Cash Fund (SG9999005961.MF)$ but am considering to allocate a certain % into the new $Fullerton Fund - Fullerton SGD Liquidity Fund (SGXZ40088619.MF)$ to better make the necessary adjustments needed in the future if the need arises
3. Yes my outlook for money market funds are still very positive seeing how the performance have been pretty consistent and within expectations
硝子桑 : 3. Are you optimistic about money market funds? Have you invested in Moomoo Cash Plus? Which fund had the most positive impact on your investment portfolio in 2023? The Fulton Singapore Monetary Fund gave me a good option other than bank interest, stable returns, low risk, and suitable for storing large amounts of money
小trader : Interest Rate Outlook:
From my research, it appears that the interest rates may have reached their peak, and there are signs of a downward trend in inflation. The Federal Reserve seems inclined to maintain a 'higher for longer' stance to monitor inflation trends. While most investment banks project potential rate cuts in the second half of 2024, uncertainties persist. The likelihood of rate reduction in Q1 remains uncertain and depends on the pace of inflation decline and labor market conditions. Despite the slim chances, I believe a Q1 rate cut is plausible.
Investment Strategy Adjustments:
In response to a potential shift in interest rates, my strategy involves reallocating funds from bonds and money market instruments to equities as rates decrease. I focus on identifying undervalued stocks, particularly within sectors such as Cybersecurity, Healthcare, Consumer Staples, REITs, and Energy. Key metrics guide the timing of this transition, ensuring a favorable risk-reward profile in the equity market.
Money Market Funds and Portfolio Impact:
My positive outlook on money market funds extends into 2024, considering the attractive yields even amid a potential Fed rate cut. While Moomoo Cash Plus remains appealing, my allocation will adjust to reflect the evolving risk-reward dynamics between money market funds and equities.
Lcc888 : 1. Do you believe that the Fed's rate hike cycle has concluded? Is it possible for interest rates to be lowered in the upcoming Q1 quarter?
Yes
2. With a potential change in the Fed Rate, are you changing your investment strategy? What adjustments will you make for next year?
Invest in bond funds
3. Do you have a positive outlook on money market funds? Have you invested in Moomoo Cash Plus? Which particular fund has had the most positive impact on your portfolio in 2023?
$Fullerton SGD Cash Fund (SG9999005961.MF)$ is a good investment
Lrx88 : I think the fed’s rate hike cycle is nearing an end and we should be seeing a pause or even a cut soon since inflation has dropped greatly in the us.
If fed rate drop I may have to allocate away from cash funds towards more high yield assets such as stocks as money market yields will drop too.
I think moomoo money market funds are a good product during this uncertainty as if rates drop u can redeem to buy stocks and if rates remain high u can enjoy the higher yield.
$Fullerton SGD Cash Fund (SG9999005961.MF)$
Is what I have been putting my money for the 5.8% yield.
I like how the gains are high and clear daily with quick liquidity.
ccl2 : 1. Do you believe that the Fed's rate hike cycle has concluded? Is it possible for interest rates to be lowered in the upcoming Q1 quarter?
May have a bit more hike
2. With a potential change in the Fed Rate, are you changing your investment strategy? What adjustments will you make for next year?
Invest in $Apple (AAPL.US)$
3. Do you have a positive outlook on money market funds? Have you invested in Moomoo Cash Plus? Which particular fund has had the most positive impact on your portfolio in 2023?
Invest in $CSOP USD Money Market Fund (SGXZ96797238.MF)$
GabyWoon : I think they will be raising rates more as inflation is sticky and persistent. Being in a technological economy means less physical goods are in the economy, hence supply chain and interest rate has lesser impact. Everyone guess is anyone guess.
Slim APP : We don't see a singular upcoming bearish catalyst, although strikes, the shutdown, and the resumption of student loan repayments collectively will sting and drive bumpiness in the data between now and their next decision. As a result, we believe that their next meeting will be live, but not a done deal.
The jobs picture has been solid, with an unemployment rate of 3.8% just slightly higher than it was a year ago. Job openings have been coming down, helping the Fed mark progress against a supply-demand mismatch that at one point had seen two positions for every available worker.
Inflation data also has gotten better, though the annual rate remains well above the Fed's 2% target. The central bank's favored gauge in July showed core inflation, which excludes volatile food and energy prices, running at a 4.2% rate.
Consumers, who make up about two-thirds of all economic activity, have been resilient, spending even as savings have diminished and credit card debt has passed the $1 trillion mark for the first time. In a recent University of Michigan survey, respective outlooks for one- and five-year inflation rates hit multiyear lows.
Good investment funds here
1. $Fullerton Fund - Fullerton SGD Liquidity Fund(SGXZ40088619.MF)$
2. $Fullerton SGD Cash Fund(SG9999005961.MF)$
3. $CSOP USD Money Market Fund(SGXZ96797238.MF)$
GodSpeed289 : Boardly speaking, the interest rates are subjected to inflation pressure. If inflation readings continue its downward trajectory, Fed is expected to lower down in mid-2024. With a still-too-high inflation, slowing global growth, and geopolitical tensions , for the first half of 2024, I will stay patient and be selective. I would, similarly to 2023, simply stick to the trustworthy MMF by investing in Moomoo cashplus funds. Enjoying the 60 days of 5.8% interest while staying liquidity, observing, and aiming for small openings in stock markets that can generate positive returns. Gold may be another alternative as it tends to benefit when interest rates fall.
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