It seems like virtually everyone has been holding their breath in anticipation of the Fed’s big announcement regarding interest rate hikes. I’ll admit that I’ve been anxiously awaiting the news myself…
But as this meeting drew closer and closer, I realized that a win-win situation was forming in the stock market. It became clear:
* If the Fed raises rates, make money this way.
* If the Fed stands pat, make money that way.
Here’s how the Fed’s announcement could basically throw money at you…
I love win-win situations, especially when it comes to money. That’s why I’m so excited to bring one straight to you right now.
As we all know, the Federal Reserve’s decision on rate hikes will likely have a very significant impact on pretty much every part of the market. That much has been apparent for a long time.
But I’m much more interested in the specifics. That’s what drew my attention to a piece of Wall Street that I think will be most affected by whatever the Fed decides – the big banks.
Here’s how I see a profitable situation for you and I for either Fed decision…
1. The Fed raises rates
Let’s say that the Federal Deserve announces today that their going to begin raising interest rates starting now. It’s been a long time coming, but how can we profit? How will big banks react?
Well, this would be the third big favorable piece to the puzzle for big banks, such as Citigroup (C), Bank of America (BAC), and Goldman Sachs (GS)…
- Rising rates are inherently good for banks,
- They’re now reasonably priced after the market fall, and
- Europe could continue quantitative easing.
If Europe announces another round of QE even as the United States begins raising rates, big banks could burst through resistance quickly and you could easily profit from the climb.
2. The Fed stands pat
Now let’s say that the Fed decides to put of rate hikes until at least 2016. Now what?
While the rest of the market might expect a bump in the right direction, big banks will now face more time without interest rates after they must have been expecting them since expecting them for months.
In this scenario, big banks could run into trouble trying to overcome a particular line of resistance that’s formed for all the big banks, which have been following a very similar pattern together.
That’s the line I’ll be watching closely, and if the big banks fail to overcome it, I’ll be telling Midas Premium subscribers how to easily cash in from it…
