(3 May 2023) As expected, the Fed hiked interest rates another 25 basis points today
as part of their ongoing effort to curb inflation. While Fed Chair
Jerome Powell acknowledged the possibility of pausing the tightening
cycle in June if it was warranted by the data, he remained somewhat
non-committal about the direction of interest rates for the rest of the
year. While mere mention of a possible pause was welcome news to
investors, the market eventually sold off late this afternoon as the
uncertainty surrounding the Fed’s future rate path began to sink in.
Markets have been looking more vulnerable in recent days as economic
data is showing more signs of softening. And yet if inflation continues
to be elevated while the economy is slowing, it could paint the Fed
into a corner without any obvious escape plan. Chair Powell is hoping
that the impending recession will do most of the Fed’s dirty work as
layoffs will dampen wage growth and thus break the wage-price feedback
loop.
This period of choppy volatility may not yet be done as we approach
Friday’s lunar eclipse. The eclipse is due to reach its maximum at 1.33
p.m. New York time. While eclipses tend to have bad astrological
reputations as they are often seen as harbingers of difficulty and
disruption, this isn’t always the case as far as the stock market is
concerned. In fact, some eclipses pass without any significant market
reaction at all. This one is a bit more suspect, however, since it
occurs at 20 Libra, just four degrees from an opposition with Uranus,
the planet of sudden and unexpected changes. And yet it’s possible that
the Venus-Jupiter-Neptune alignment could exert a short term mitigating
effect.
But the larger planetary picture is looking somewhat unstable. The
most obvious potential trouble spot involves retrograde Mercury which is
slowly backing into a near-conjunction with Rahu (North Lunar Node)
ahead of its direct station on May 14 at 11 Aries. And both Mercury and
Rahu come under the influence of the full-strength 3rd house/60 degree
aspect from Saturn. Aside from any potential eclipse effects, this is a
decidedly difficult alignment. We should therefore be open to the
possibility that collective sentiment could worsen next week when this
alignment makes its closest approach.
For more details, check out my weekly subscriber newsletter
which is published every Sunday. In addition to reviewing the key
planetary and technical influences on US and Indian stocks for the short
and medium term, I also provide an astrological analysis of potential
upcoming moves in currencies, gold and oil.
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Photo Credit: AdamChandler86
