Get ready for the FOMC and Jerome Powell

13 dic 2023

With the SPX trading just about 3.8% from its all-time highs, all eyes will be on the Federal Reserve, which is scheduled to announce a monetary decision later today, followed by a press conference. We do not anticipate any change to the FED Funds Rate as we expect the central bank to take additional time in order to assess the lagging effects of previous rate hikes. During the press conference, we expect Jerome Powell to outline a surprisingly strong labor market and resilient parts of the economy in spite of rising living costs and debt servicing. In some remarks, the chairman will likely admit that a great deal of a job has already been done, but there is still more to do, with inflation being far from the 2% target. Overall, the conference’s tone will likely be carried in the well-known fashion of “higher for longer” and lack of clarity on steps toward easing. We will provide a review of what was said after the conference.

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

14 dic 2023

Nota

After leaving interest rates unchanged and during the FOMC press conference, Jerome Powell spoke along the expected lines, outlining a solid labor market, resilient economy, and progress in fighting inflation. In addition to that, the dot plot projections revealed that officials expect interest rates to be lower from the current levels at the end of 2024. However, Jerome Powell noted it is premature to take additional rate hikes off the table. Instead, he reiterated the need to monitor the economy, which likely still has not experienced the full effects of previous rate hikes.