🇺🇸 The Fed’s not playing around

Fed hikes rates and warns more’s coming | Germany nationalizes a faltering energy firm | [TOGETHER WITH]( Hi {NAME}, here's what you need to know for September 22nd in 3:12 minutes. 🎨 There’s art in investing, that’s for sure, but maybe it’s time to talk about investing in art. Join The Fine Art Group’s Philip Hoffman for [How To Hedge Against Inflation With Fine Art]( on Thursday, and find out how to freshen your portfolio up with a lick of paint. [Grab your free ticket]( Today's big stories - The Fed upped rates and said they're not dropping soon - Trend-following strategies are winning big right now, so here's how you can too – [Read Now]( - Germany's nationalizing an energy giant – at a total cost of $29 billion When The Fed Says “Hike”, We Say “How High?” [When The Fed Says “Hike”, We Say “How High?”] What’s Going On Here? The Federal Reserve (Fed) delivered its expected 0.75 percentage point [hike]( and warned there’d be more big increases to come. What Does This Mean? After August’s dismal inflation report, there was never any doubt that the Fed would jack up rates – but the announcement itself was just a warm-up for the main event: the Fed’s long-term rate projections. A lot has changed since the last update in June, and the Fed’s “dot plot” (forecast of future rates) now points to peak rates of 4.6% in 2023 and no falls till 2024 – sparking an initial selloff by investors who hoped for a lower peak and earlier cuts. Why Should I Care? For markets: Read my lips. “Fed Watchers” try to predict future rate decisions by picking apart Federal Reserve statements. It’s a tricky business – and there are more reliable ways of guessing at the Fed’s next play. “Credit spreads” are one: they’re a measure of how expensive it is for companies to borrow – and the fact they’ve jumped 70% over the last year for firms with strong credit ratings suggests that companies are feeling the interest-rate pinch. The Fed will be watching signs like this for indications of debt-related stress: if corporate borrowing costs spiral, they just might ease up on hikes a little. The bigger picture: The Fed’s tightrope walk. As the Fed’s been raising rates, the US [yield]( curve’s drooped like a sunflower in late fall: in other words, it’s [inverted](, a pretty reliable sign that a recession’s looming. How painful that recession is depends on two key things: how long inflation sticks around and how high rates have to go to conquer it. See, if the Fed raises too slowly, inflation will continue, creating bigger problems down the line. But go too fast, and it risks triggering a drawn-out recession. No wonder the world’s watching the Fed so closely. You might also like: [You’ll know a correction is coming when this signal flashes.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=When The Fed Says “Hike”, We Say “How High?”&utm_campaign=daily-global-22-09-2022&utm_source=email) Analyst Take The Hedge-Fund Strategy That’s Winning This Year [The Hedge-Fund Strategy That’s Winning This Year]( By Russell Burns, Analyst Trend following has been [one of the best-performing hedge fund strategies]( this year – the SG Trend Index has climbed 29.6%, while the S&P 500 has fallen 19%. Those investors have managed such [eye-watering returns]( by focusing on the price signals, seeking out momentum plays, and keeping in mind that old mantra: [don’t fight the Fed](. And they seem to be getting [a lot of things right](. That’s today’s Insight: [we’re looking at the hedge fund strategy that’s winning this year](. [Read or listen to the Insight here]( SPONSORED BY WEISS RATINGS The million-dollar secret Dr Martin Weiss has been helping folk make money – in good times and bad – for 50 years. This year sure feels like “the bad”, so it’s the perfect time for [the founder of Weiss Ratings]( to share his best advice in [a short video]( you can watch today for free. You’ll find out how to [build a protective bubble]( around your assets, which stocks Dr Weiss is steering clear of right now, and [six steps]( to help you build wealth even during a market slump. On top of that, Dr Weiss will let you in on [his family’s million-dollar bear market secret](, designed to help you [turn petty cash into seven figures](. That’s barely scratching the surface: [discover all those tips and more with just one click.]( [Watch The Video]( Germany Swallows the Uniper Berry [Germany Swallows the Uniper Berry] What’s Going On Here? Germany’s poised to [nationalize]( utility firm Uniper, once Europe’s biggest importer of Russian gas. What Does This Mean? Germany’s energy sector is struggling – and the cost of sustaining it is (h)eating the German taxpayer out of house and home. Back in July, the government agreed to a €15 billion ($15 billion) rescue package for Uniper, a firm it says is of “paramount importance” to the country’s economy. But as the energy crisis has deepened, the damage to Uniper has spread – and now, nine weeks later, the company finds itself on the cusp of full-blown nationalization. This new deal will see Finnish energy firm Fortum sell its stake – a real thorn in its side – to the German government, bringing the total Uniper bailout bill to €29 billion ($29 billion). Why Should I Care? Zooming in: This ain't our first (or last) rodeo. Seasoned investors who served in the trenches during the global financial crisis might be feeling a sense of déjà vu right now: after all, the spectacle of once-mighty institutions withering into public ownership or running into the arms of competitors has a distinct late-noughties flavor to it. Back then, it was banks and other financial institutions that were considered “too big to fail” – but today’s suppliers of vital energy to companies and homes might arguably deserve that label too. Watch this space, then: Uniper’s nationalization could be a sign of more to come. The bigger picture: There might be a slim silver lining. As bailout bills mount, governments will be asking themselves one key question: “How do we stop this happening again?” The likely answer: reliable, home-grown, renewable energy. In the past, critics of this approach liked to tout the cost of ditching fossil fuels – but the current energy crisis has made the cost of depending on them all too obvious too. So if there’s any silver lining to this predicament, it could be that it’s pushing western countries to speed up their transition to renewable sources of energy. You might also like: [The winners and losers of Germany’s energy crisis.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Germany Swallows the Uniper Berry&utm_campaign=daily-global-22-09-2022&utm_source=email) 💬 Quote of the day “To speak ill of others is a dishonest way of praising ourselves.” – Will Durant (an American writer, historian, and philosopher) [Tweet this]( 🎯 On Our Radar - Grandparents have great stories. We just need to [get better at listening](. - Get results in days, not weeks. We’re not talking about gyms: [this is market research](.* - You can stay friends with your ex. The real question is [whether you should try](. - This will rustle your feathers. NFTs have [never been cuter.](* - Life on Mars? [Billions of years ago, maybe](. When you support our sponsors, you support us. 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