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Fed's Potential Interest Rate Cut in the Wake of Inflation ...
2024-07-26 14:59:09
Economy
Finance
Markets

Fed's Potential Interest Rate Cut in the Wake of Inflation Trends

Recent reports suggest a potential interest rate cut by the Fed as inflation trends evolve. Factors like waning pandemic savings and a weakening job market propel calls for rate cuts.

Powell's cautious stance on 2% inflation precludes an imminent July cut but signals a likely September adjustment. Vanguard predicts a rate hold at 5.25-5.5% through 2024, reflecting confidence in growth and inflation persistence.

Despite cooling in the Fed's preferred inflation measure, policymakers remain vigilant, delaying immediate rate cuts. The market foresees a 99.8% chance of a rate cut by September.

Vanguard's forecast of 3.4-5.4% annualized growth for US stocks anticipates market reactions to potential rate alterations, hinting at diverse impacts across financial sectors.

Related news on that topic:

US Stocks Set for Rebound as Investors Await Key Inflation Data

US stocks are set for a rebound as investors eagerly await the release of the June PCE index, the Fed's preferred inflation indicator. This data will influence expectations for rate cuts and test Wall Street's confidence in a September pivot. The recent sell-off in tech stocks, driven by underwhelming earnings from Big Tech companies, has caused the Nasdaq Composite and S&P 500 to suffer, prompting investors to move from megacaps to smaller cap stocks. However, with easing inflation data and expectations of future rate cuts, US stocks have risen, with the Dow, S&P, and Nasdaq all climbing. Investors are also preparing for quarterly earnings reports from tech giants Apple, Microsoft, Amazon, and Meta next week. The market is currently contemplating whether the recent sell-off is indicative of sustained lower prices or just a typical bull-market pullback.

US Stocks Rebound on Easing Inflation Data and Tech Giant Earnings

US stocks soared as investors reacted positively to the easing inflation data and anticipated interest-rate cuts. The Dow, S&P, and Nasdaq recovered from the recent tech-led sell-off and climbed higher. The key focus was on the PCE index, which showed a slow rise in 'Core' PCE. Additionally, investors are eagerly awaiting quarterly earnings from tech giants such as Apple, Microsoft, Amazon, and Meta. Wall Street is now questioning whether the recent sell-off is a turning point towards lower prices or just a typical bull-market pullback. Despite the positive sentiment, the broader market was dragged down by selling pressure in the mega-cap space, with volatility making a strong comeback. Meanwhile, Bristol Myers Squibb, Colgate-Palmolive, and 3M are set to publish their second-quarter updates. Overall, the market remains cautious but optimistic, with expectations for a September Fed rate cut to support stocks after the recent tech-led selloff.

Read 7 more recent news on this topic

The press radar on this topic:

The Street
26. Juli 2024 um 12:46

Former Fed official changes tune on what's next for interest rates TheStreet Daily Newsletter

Economy
Finance
Dudley, a former Fed official, now advocates for rate cuts, citing factors like waning pandemic savings and a weakening job market. However, Powell wants more confidence in 2% inflation before easing policy. The odds of a July cut are low, but a September cut is likely, especially after Powell's Jackson Hole speech. Upcoming data, including GDP and PCE inflation, will influence the Fed's decision.
The Street
26. Juli 2024 um 21:45

Vanguard offers surprising view on Fed interest rates TheStreet Daily Newsletter

Economy
Finance
Fed interest-rate policy has fluctuated in 2024 amid economic shifts. Experts initially predicted up to 6 rate cuts, but forecasts shifted to 1-2 cuts as the economy and inflation proved stronger. Fed Chair Powell signaled a rate cut may come soon. Former NY Fed President Dudley, who previously favored higher rates, now calls for a cut. However, Vanguard economists anticipate the Fed will hold rates at 5.25-5.5% through 2024, citing continued growth, labor momentum, stubborn inflation, and their..
New York Times - Business
26. Juli 2024 um 13:24

Fed’s Preferred Inflation Number Cooled Overall in June

Economy
Politics
Finance
The gradual cooling of the Fed's preferred inflation measure and steady core inflation are unlikely to spur urgency for a rate cut at the central bank's meeting next week, as policymakers remain cautious about fully controlling price increases.
The Street
29. Juli 2024 um 19:45

PCE inflation report cements timing of next Fed interest rate cut TheStreet Daily Newsletter

Economy
Finance
The Commerce Department's CPI report earlier this month showed a 3% annual inflation rate, down from 3.3%, aided by a 4% drop in gasoline prices.
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