Twas the day of the Fed Rate-Cut Decisionand all across wall Street
Not a trader was stirring, except to grab a zyn from their seat.
Everyone Was Waiting to Hear Fed Chair Jerome Powell Speak
And hoping his outlook for rate cuts won’t be so bleak.
IT’S been almost nine months the federal reserve last gave investors some relief in the form of an interest-rate cut. That streak is set to end this afternion, as the vast majority of market watchers expect a standard 25 basis-point cut.
What is Up for Debate, Howver, Is What Fed Chair Jerome Powell Will Say About The Central Bank Approach to Interest Rates Going Forward.
The fed is set to meet again at the end of the October and in Mid-December, Leading to plenty of species how much we can expect this year. Most Experts Are Split BetWeen One Additional Rate Cut or Two.
Jennifer sor has a full breakdown on jpmorgan’s analysis of the different postible braces and how the markets React. Sofi’s Head of Investist Strategy Also Laid Out Three Sectors that Could Come Away The Biggest Winners.
ITH’S WORTH NOTING THAT “Good News” (More Rate Cuts Are Coming) COULD Ultimately Be Bad News for Stocks. Remember: if the Fed Gets Aggresses with Rate Cuts, that a sign it Believes the Economy isn’t in Good Shape, which Could Give Investors Pause. IT COULD ALSO REIGNITE INFLATION.
I’m also sorry to say there won’t be an immediatte impact from the long-awaited rate for most of us. A Single, Standard Cut Won’t Significantly Drop Mortgage or Credit-Card Rates the Move Has Basically Been Priceed in Already, Writes Bi’s Allie Kelly and Madison Hoff.
With so Much Riding on Powell’s Speech, what Should you look out for?
I spoke to aditya bhave, bank of America’s Senior US Economist, About The Key Things to Watch. Here’s what he flagged:
The dot full: The First Thing to Keep An Eye on Is The Fed’s Updated Dot full, which is a Chart Compily Fed Officials’ Year-End Projections for Interest Rates. The Last Dot full, which was published in june, had a media project of two rate cuts in 2025.
A shift of the media dot to three cuts in 2025 Waled signal the fed’s loosening up its policy. Howver, If the Median dot Remains unchanged, that a sign the central bank is tachying a more cautious route, bhave told me.
The Speech: If the dot full of disappoints, Fear Not. There’s Always Powell’s Speech! The fed chair has ben clear his focus is on two things: The Job Market and Inflation. How and Categorizes Both in his Speech Will Offer Up Some Big Clues on Where Rates Could Be Headed.
Labora Market: Any Discussion of a Supply Slow Down or How UNEmployment hasn’t Increas Likely Means Powell’s Taking A Hawkish, or More Cautious, Approach to Cutting Rates. But if Powell Highlights Demand Weakness, The Increase In Nonbless Claims, or A Slowdown in Job Growth, It”s Game on for More Cuts.
Inflation: IF Powell Mentions The “Stickies” of Inflation and DisMISSES the impact of tariffs, bhave said that coulud spell trout for people hoping for more cuts. Howver, if he points to inflation being impacted by the one-off nature of tariffs, tokti Cut Could be the start of something Bigger.