3/7/2024

Fed boosts hopes for rate cuts in 2024

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ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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Key points:

  • Powell said the Fed is likely to cut rates because the US economy is not on the verge of a recession.
  • US job growth in February was below expectations.
  • All three major Wall Street indexes rose on March 6th.

Wall Street’s three major stock indexes posted gains on Wednesday, March 6. This was supported by both macroeconomic data and comments from Federal Reserve Chairman Jerome Powell, which strengthened expectations of a cut in the Fed’s benchmark interest rate this year.

Powell also noted that the American economy appears to be far from recession. However, Powell did not make specific promises regarding the timing of monetary easing, citing uncertainty about inflation.

As a result, the Dow Jones Industrial Average rose 75.86 points, or 0.20%, to 38,661.05. The S&P 500 added 26.11 points, or 0.51%, to 5,104.76. The Nasdaq Composite rose 91.96 points, or 0.58%, to 16,031.54.

Powell’s statement

Jerome Powell, chairman of the Federal Reserve, announced his expectations for lower interest rates. He also stressed that the American economy does not appear to be heading into a recession. At the same time, Powell refrained from making specific promises regarding the timing of easing monetary policy, citing uncertainty about the issue of a sustainable reduction in inflation.

In his speech to Congress, Powell noted that inflation has fallen significantly from its peak 40 years ago, reached in 2022. But he said Fed policymakers need “greater confidence” in a sustained decline in inflation before they can begin cutting rates.

Macrostatistics boosted hopes

In addition to Jerome Powell’s speech, a series of economic data also helped bolster hopes for rate cuts and confidence in the labor market.

According to published data, US private sector job growth in February was slightly below expectations. The Job Openings and Labor Turnover Survey (JOLTS) showed a slight decline in the number of vacancies in January, as well as a slower pace of hiring as labor market conditions gradually improved.

The February nonfarm payrolls report, scheduled for Friday, is expected to provide a more complete picture of the labor market.

ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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