The Fed will not hike rates if tech stocks continue to decline – analyst

What happened

Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, said the Federal Reserve will not raise interest rates in December if technology stocks keep falling. Rate hike odds slipped to 72% from 80% a day earlier, according to the CME FedWatch Tool.

Confirmed

Global impact / market context

Technology stocks are a large part of the U.S. stock market and economy, so a continued drop could stop the Fed from raising rates. That would lower the return on holding U.S. dollars and could support gold prices, which have been falling since January.

Analyst inference

Investors currently see a 72% chance of a December rate hike, which means most still expect one. Deutsche Bank's George Saravelos noted recent sharp selloffs in both tech stocks and the dollar at the same time, warning the dollar may not always act as a safe haven.

Analyst inference

What to watch

1. Watch whether technology stocks continue to decline, since Boockvar ties a December Fed rate decision directly to that move. Confirmed
2. Boockvar expects the U.S. dollar to weaken, real interest rates to drop, and gold to end its corrective move if the Fed pauses rate hikes. Proposed
3. Watch the dollar and tech stocks for joint selloffs, since Deutsche Bank warns the dollar's safe-haven role may fail in an AI-driven correction. Analyst inference

Evidence

• seekingalpha.com