News / Uncategorized
[Platinum Insights] The Markets expectation and reality of the FOMC meeting today!
[Platinum Insights] The Markets expectation and reality of the FOMC meeting today!
August 21, 2023
Pre-market price action for the three major indices were trading around the flatline on Wednesday, as investors appeared quite reluctant to open significant positions ahead of the outcome of the Federal Reserve’s two-day policy meeting later today.
The central bank will likely hike its key interest rate by 50 basis points following four consecutive 75 bps increases. Softer-than-expected US inflation data Tuesday added to evidence that price pressures are cooling while reinforcing this narrative of a less aggressive tightening.
Still, a robust job market could force the Fed to lift rates higher than markets are currently pricing, something that investors will parse in the latest projections.
Although yesterday’s price action was positive at the close, the reals story was how high the markets went up but then gave up a majority of the gains at the end of the day. The market is hoping (and hope is not a strategy) that the FED will be ending rate hikes or actually start cutting rates.
This is what CNBC said in this morning’s story: “The signal that inflation may have peaked was positive for stocks as it means the Fed may be one step closer to halting interest rate hikes or switching to cuts, which would fuel equities.”
I think the market may be ahead of itself with this thinking as Chairman Powell spoke last week at the Brookings institute where I heard something totally different. “The time for moderating the pace of rate increases may come as soon as the December meeting,”
But he added that “the timing of that moderation is far less significant than the question of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level.”
So, I heard we may be able to lower the rate to 50 BPS in December, but we may need to raise rates for a longer timeframe, then keep those rates at higher levels over time. We will know later today.
Share this article:
More in Uncategorized:
Hedge funds and banks typically use multiple time frames for intraday trading
Hedge funds and banks typically use multiple time frames for intraday trading, as this allows them to gain a comprehensive...
![Trent Grinkmeyer in front of stock market with bull background](https://bestofusinvestors.com/uploads/2023/06/trent-e1687263019450-300x300.webp)
Trent Grinkmeyer
August 30, 2024
Nvidia Earnings Call: A Record Quarter with a Twist
Nvidia’s Q2 earnings call was a mixed bag, with the company reporting a record quarter but also revealing a drop...
![Kerry Grinkmeyer in a suit standing in front of a stock chart with a bull on it](https://bestofusinvestors.com/uploads/2023/07/kerry-300x300.webp)
Kerry Grinkmeyer
August 29, 2024
Nvidia Earnings: A Critical Moment for Big Tech
As we approach Nvidia’s earnings report, the tech world holds its breath. This isn’t just about one company’s performance; it’s...
![Trent Grinkmeyer in front of stock market with bull background](https://bestofusinvestors.com/uploads/2023/06/trent-e1687263019450-300x300.webp)
Trent Grinkmeyer
August 28, 2024
The Sleeping Giant: Why Intel is an Undervalued Stock
As the world’s largest semiconductor company, Intel (INTC) has long been a household name in the tech industry. However, despite...
![Kerry Grinkmeyer in a suit standing in front of a stock chart with a bull on it](https://bestofusinvestors.com/uploads/2023/07/kerry-300x300.webp)
Kerry Grinkmeyer
August 23, 2024
The Trillion Dollar Addiction...
The Trillion Dollar Addiction That Amazon, Google, Meta and Microsoft Will Be Selling Next Year As I discussed in my...
![Kerry Grinkmeyer in a suit standing in front of a stock chart with a bull on it](https://bestofusinvestors.com/uploads/2023/07/kerry-300x300.webp)
Kerry Grinkmeyer
August 19, 2024
What is an AI Agent? What Can It Do For You? Where Can You Get One?
As I discussed with my tribe during our recent stock talk, I’m excited to share with you the concept of...
[Platinum Insights] The Markets expectation and reality of the FOMC meeting today!
August 18, 2024