(14 December 2015)
All eyes are on Fed Chair Janet Yellen this week as the long-awaiting
rise in interest rates may finally come to pass. After a false start in
September in which the Fed apparently got scared off a hike after a
sharp sell-off in world markets in August, the stage is set again for
Yellen & Co. to pull the trigger and raise rates for the first time
in 9 years. The consensus view is that she will follow through this
time and raise the trend-setting overnight lending rate 0.125% to
0.25%. The larger question is what kind of language she uses to signal
the pace of future hikes in 2016 and beyond. Given the fragility of
markets these days, there is a sense that she will do everything
possible to downplay fears of a fast schedule of rate hikes which could
wreak havoc in many financial markets. Interestingly, the Sun enters sidereal Sagittarius on the same day of the Fed announcement on Wednesday the 16th. Sagittarius is a sign that is associated with optimism, and it is no coincidence that it is ruled by the planet Jupiter, which is known as the Great Benefic. The entry of the Sun into Sagittarius may therefore reflect some optimism and confidence in the Fed decision, perhaps as Yellen emphasizes all of the positive economic indicators that justify a rate hike. But will this then translate into a favourable market reaction to Yellen's decision? This is a more complex question.
First off, we can see there are no clearly negative alignments in play this week like we saw last week. So that suggests that a major sell-off after the decision is unlikely. But whether stocks can significantly rise after the decision is harder to predict.
If we look at the horoscope of the Federal Reserve, we can see that some kind of bold action is very likely on Wednesday as transiting Mars (25 Virgo) will form an exact square with the natal Mars (26 Gemini) in the chart. In the current circumstance, that suggests the Fed will raise interest rates, although it should be said that "bold" Mars-type action could be interpreted in different ways.
Such Mars-to-Mars hard aspects are symptomatic of tense situations (yes!) and may even indicate some short-lived turmoil following the announcement. But aside from the Mars aspect, there are no really nasty influences here so this is another reason why I would doubt any huge reaction to the decision. Also, we can see that transiting Venus will conjoin the natal Moon in the chart. This is a more calming influence and signifies favourable outcomes, at least from the Fed's perspective. The last thing Yellen wants is a market sell-off or a huge Dollar rally, so that also argues for a fairly muted reaction to the announcement.
The Fed horoscope appears much more afflicted in March when transiting Ketu exactly conjoins natal Rahu and Saturn stations in close conjunction with the natal Mercury. I would think that March will be a time when the Fed will have to confront more pressing problems. By contrast, this December FOMC meeting looks quite mild by comparison.
Weekly Market Forecast
Stocks fell across most of the world last week as investors reacted to the sharp decline in crude oil and diminishing growth prospects for the economy. In New York, the Dow had its worst week since August falling 3% closing at 17,265. In India, the Sensex lost 2% closing at 25,044. This bearish outcome was not surprising as in last week's market forecast I had noted a scary-looking Mars alignment with Uranus and Pluto in the second half of the week. I thought we might have got more gains in the early part of the week on the Venus influence but certainly the latter part of the week did live up to its negative potential.
This week is all about the Fed, of course, and its announcement on Wednesday afternoon. Besides the diffusely positive Sun influence, the Venus alignment with Pluto and Uranus also suggests some bullish sentiment. Mars may cause some problems on Thursday or Friday perhaps as it approaches an alignment with Jupiter. However, I suspect this negative Mars effect may not occur until next week.
