Pre-market indices are turning around yesterday’s mostly mild sell-off, as valuations have apparently been brought down sufficiently to withstand the expected good news from the Fed that interest rates will not rise again this afternoon. Had we already been priced for perfection — at or near 2021/22 highs — we might expect a “sell the news.” Early market participants are already buying into it, instead.
The Dow is up +100 points at this hour, with the S&P 500 +15 and the Nasdaq — still positioned to bring in its worst trading month of the year — is +55 points currently. The big news today, obviously, is the conclusion of the two-day Federal Open Market Committee (FOMC) meeting, which will result in a new Fed funds interest rate level — 99% of analysts expect a continued 5.25-5.50% — and a subsequent press conference with Fed Chair Jerome Powell.
Taking Powell’s temperature on his outlook through the rest of the year will take center stage this afternoon, likely between 2:15-2:30pm ET, including whether the Fed feels current rates are plenty high or if they are looking to tighten the screws another 25 basis points at their next meeting in November. Right now, about a third of analysts believe another rate hike — it would be the 12th since March of last year — is indeed in the cards, data permitting.
Certainly there is scant worry about a recession on the near-term horizon; importantly, a year ago (even just a few months ago) fears abounded about a recession in the second half of this year. And while it’s foolish to say it can’t happen — unforeseen circumstances, like when Russia invaded Ukraine unprovoked in late February of 2022, are always considered part of the calculus — the U.S. economy has passed the crucible to this point, without much in view that could trip it up.
Labor strikes may be involved with whatever coming headwinds challenge economic growth — both in LA with the writers and actors, and Detroit with the United Autoworkers (UAW) — but it’s unclear at this point what Powell’s overview is on this subject. Perhaps we’ll see some clarity on this viewpoint today.
As far as Fed Chairs go, Powell has spoken with clarity, if not always with accurate assessments (see “transitory” inflation he was touting two years ago). He’s also not shied away from speaking with force on important issues, and has caused market sell-offs in the wake of his appearances. We shall see if something similar awaits us later today.
Image: Bigstock
Pre-Markets in the Green Ahead of Fed's Decision
Pre-market indices are turning around yesterday’s mostly mild sell-off, as valuations have apparently been brought down sufficiently to withstand the expected good news from the Fed that interest rates will not rise again this afternoon. Had we already been priced for perfection — at or near 2021/22 highs — we might expect a “sell the news.” Early market participants are already buying into it, instead.
The Dow is up +100 points at this hour, with the S&P 500 +15 and the Nasdaq — still positioned to bring in its worst trading month of the year — is +55 points currently. The big news today, obviously, is the conclusion of the two-day Federal Open Market Committee (FOMC) meeting, which will result in a new Fed funds interest rate level — 99% of analysts expect a continued 5.25-5.50% — and a subsequent press conference with Fed Chair Jerome Powell.
Taking Powell’s temperature on his outlook through the rest of the year will take center stage this afternoon, likely between 2:15-2:30pm ET, including whether the Fed feels current rates are plenty high or if they are looking to tighten the screws another 25 basis points at their next meeting in November. Right now, about a third of analysts believe another rate hike — it would be the 12th since March of last year — is indeed in the cards, data permitting.
Certainly there is scant worry about a recession on the near-term horizon; importantly, a year ago (even just a few months ago) fears abounded about a recession in the second half of this year. And while it’s foolish to say it can’t happen — unforeseen circumstances, like when Russia invaded Ukraine unprovoked in late February of 2022, are always considered part of the calculus — the U.S. economy has passed the crucible to this point, without much in view that could trip it up.
Labor strikes may be involved with whatever coming headwinds challenge economic growth — both in LA with the writers and actors, and Detroit with the United Autoworkers (UAW) — but it’s unclear at this point what Powell’s overview is on this subject. Perhaps we’ll see some clarity on this viewpoint today.
As far as Fed Chairs go, Powell has spoken with clarity, if not always with accurate assessments (see “transitory” inflation he was touting two years ago). He’s also not shied away from speaking with force on important issues, and has caused market sell-offs in the wake of his appearances. We shall see if something similar awaits us later today.