Change your focus in these markets

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You're getting hung up on something that isn't a surprise

It didn't take a financial analyst to predict an eventual increase in the near-zero interest rates of the past year, especially as the economy stormed back and prices popped.

In addition to the capitalistic pricing power that corporations are taking advantage of, the values of homes have risen 20% in the last year alone. Current homeowners, 70% of American households, should not complain about a huge five-year-jump of nearly 50% on their most prized and leveraged asset. And, many are fixed-rate mortgages, which are locked in at low, low rates most never expected to see in their lifetimes.

Reminder… not all price rises are bad!

The rebuttal to the positives of home price inflation is about the concern of buying a new house. The sale of the current home will reap record gains but another purchase will obviously be pricy.

While the jump from 3% to 5% mortgages raises payments, they are still historically extremely low.

This has been the most discussed and anticipated action to forewarn in the history of the Federal Reserve.


Interest rates at Zero were designed to stimulate jobs (9 million added in the last year-plus) and reverse the greatest deflation in history with the Covid crash.

For those that did not refinance or plan for a new purchase, the facts were in front of you that there was nowhere to go but UP. The Federal Reserve determines short-term rates with their policy but all others are determined by supply and demand.


Not a day has not gone by in the last two years that the fact of upcoming rising rates was not the major issue in finance and the markets. Now pundits say we were too slow to raise rates and it should have happened a long time ago while others are aghast that the rate of the rise is increasing.

As I've shown in this newsletter before, the markets are the best place to go for pricing of where rates are going to go… Below is a simplification of that produced by the CME exchange that shows what the futures contracts are telling us.

Right now, Tuesday morning before the June FED meeting announcement there is an almost 90% chance of a ¾% hike to the short-term rate.


With the June hike a done deal in the markets' minds, all eyes are on the future moves.

The parlor game has become predicting whether the next hikes will be ½%, ¾% or 1% moves.

But I have a different focus in mind…

I've learned in my 30-plus years of experience to focus on the destination, NOT the journey!

In reality, not much has changed in future price forecast with a 3% short-term top a couple of months ago now expected to be 4% by the end of 2024.

The Euro/Dollar futures contracts price at a discount from 100 to show what traders have priced in for future rates going out 5-10 years.


More insightful is the further out contract years…rates are now forecast to remain steady until 2030 after dropping back to 3.5%.

Fact is, the FED funds rate touched 20% in 1980 for alarmists to think about.

So yes rates will rise, but no one should be surprised.

Best wishes,

Alan Knuckman

Chief Analyst

Elite Money Trader

P.S.: These increased rates create panic in the market, but that's okay. When mainstream traders and even market makers are worried, it becomes a perfect environment to use my Income Wheel strategy. Learn how I do it here!


Trading foreign exchange, stocks, options, or futures on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade, you should carefully consider your objectives, financial situation, needs and level of experience. Classified Intelligence Brief provides general advice that does not take into account your objectives, financial situation or needs. The content of this website must not be construed as personal advice. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. You should seek advice from an independent financial advisor. Past performance is not necessarily indicative of future success.


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