โ#worldnews #JacksonHole #Fed โ
๐ฅ Market is waiting for a signal from Jackson Hole
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The Fed has always used this financial symposium as an opportunity to announce essential changes in monetary policy. Now, the rate outlook is quite transparent, and it is not so much whether Powell announces the long-awaited interest rate cut but what he will argue for the move.
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Today, the Fed is trying to manage the conflict between inflation (core PCE at 2.6% vs. the Fed's 2% target) and emerging economic risks. Traders hope for a comfortable "soft" scenario where inflation falls without causing economic discomfort. After the surprise NFP, interest rate expectations for this year have rebounded, but the dollar continues to lose ground. The Fed chief's job is to announce consensus and near-term plans.
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Fed decisions have a huge impact on Wall Street. When traders expect a rate cut, stocks usually rise. But if the Fed doesn't deliver what the market wants, it can trigger a selloff.
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Powell's tone in Jackson Hole will carry significant weight. If he hints at a more cautious approach, it could spook traders. But if he assures that rate cuts are coming, stocks could rise. The market is already pricing in a likely rate cut in September, but the size of the cut remains uncertain. Powell could remain tight-lipped, or he could state that the rate and the pace of future cuts will depend on economic data.
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If he does so, the market risks tanking. But while tech stocks are bouncing back and the S&P 500 is near record highs, the market looks cautiously optimistic.
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Either way, the markets are preparing for potential volatility. So we listen carefully and don't take unnecessary risks.
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Profits to yโall!