Sorry, Wall Street. No rate cuts any time soon
Fed chair Jerome Powell seemingly dashed Wall Street's hopes for lower interest rates. The war on inflation isn't over yet.
Investors have started to bet that the Federal Reserve could begin to cut interest rates later this year. Fed chair Jerome Powell is having none of that talk.
At Powell’s press conference Wednesday afternoon, the purple tie wearing “Silver Fox” (thats for my former CNN colleague Allison Morrow) said that no Fed members were talking about a rate cut at today’s meeting. What’s more, he added that the Fed is “talking about a couple of years out" for any rate cuts.
Stocks pulled back a bit following those remarks as hopes for Fed easing by year’s end and into next year were dashed. The Dow was still down about 200 points in late afternoon trading while the S&P 500 and Nasdaq were up ever so slightly.
But here’s the thing. Trying to figure out what the Fed might do at meetings later this fall and winter or in early 2024 seems like a fool’s errand. The Fed is clearly taking things one meeting at a time. Focus on the next batch of economic numbers (especially any reports about inflation and the job market) between now and the Fed’s next get together in late July. Then it’s time to lather, rinse and repeat for mid-December.
The Fed is data dependent. The Fed is data dependent. The Fed is data dependent. Get it? Got it? Good.