Did Powell just pour gasoline on stock market's fire?

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Did Powell just pour gasoline on stock market's fire?

Investing.com -- Jerome Powell’s recent speech at the Jackson Hole symposium has ignited a response in financial markets, and many analysts believe that his dovish tone could fuel further gains in an already hot stock market.

This aligns with the market's expectations, which have been pricing in multiple rate cuts as the Fed aims to navigate slowing inflation without triggering a recession. “Furthermore, stronger-than-expected economic news is likely in coming weeks, in our opinion. If so, that might dampen rate-cut expectations,” the analysts said

A record $6.2 trillion in money market mutual funds , including $2.5 trillion in retail MMMFs, represents significant liquidity that could quickly flow into equities if money market yields decline due to rate cuts.index. These companies are often more sensitive to changes in interest rates, and the expectation of lower rates could drive further investment in this area.

 

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