Powell reaffirms the Fed's commitment to fight inflation

 

(22 June 2022)  Jerome Powell was in the hot seat today as the beleaguered Fed Chair tried to defend his record in an appearance at the Senate Banking committee.  While the Fed has come under a lot of criticism in recent months for being behind the curve and waiting too long to raise interest rates, Powell reaffirmed his intention to reduce inflation even if it means pushing the economy into recession.  The hawkish testimony saw stocks stage a midday reversal, finishing slightly lower by the close.

Investors are now seemingly trapped between two equally bad outcomes -- the prospect of runaway inflation that acts as a drag on consumer spending and recession, which brings more unemployment and a decline in economic activity.   While bond yields have come off their recent highs in anticipation of an imminent peak in inflation, Powell's comments are a reflection that recession fears are growing, even if the direct result of the Fed's aggressive rate hikes. 

Stocks are trying to break their losing streak this week as Tuesday's session saw a strong, if oversold, bounce on the Mercury-Moon-Jupiter alignment.  However, the next few days don't augur well for stocks as Mars aligns with Rahu and Saturn.  Since all three of these planets are classified as natural malefics, there is a greater likelihood of declines as we head into next week.  Saturn will cast its full-strength 3rd house/60 degree aspect to Mars (exact June 27) while Mars forms an exact 30 degree alignment with Rahu this week.  The negative impact of these three planets is more likely to resonate with the market since they will align with the natal Moon and Mars in the NYSE horoscope.  The prominence of these malefic influences will make it harder for stocks to rise much further in the near term.

The other thing to note is that Saturn is now retrograde and is therefore approaching another exact 60 degree aspect to the natal Moon (28 Pisces).  Saturn is generally a bearish influence on the Moon and its slow velocity here is likely to further increase its potential for damage in the coming weeks.  Using the 8.52 a.m. chart for the NYSE, Saturn is due to reach its theoretical maximum influence on the Moon on August 8.  Even with the uncertainty about the birth time of the NYSE horoscope and hence the correct position of the Moon, the ongoing affliction by Saturn is going to be a negative factor on sentiment. 

On the plus side, at least Rahu will soon be separating from its aspect with natal Mars (27 Leo).  This should represent a gradual weakening of this negative factor, even if it may not be enough to offset the ongoing Saturn influence.  So while bear market rallies will still be possible during the course of this Saturn-Moon aspect, but the potential for a powerful, V-shaped rebound looks low for the next several weeks.

For more details, check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   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.