Here's what the stock market liked from the Fed

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The Fed came very close to promising a rate cut Wednesday, and now markets are focused on a possible July rate cut.

"I think they're fully planning on cutting in July, absent stronger data," said Ed Keon, QMA chief investment strategist. "The market liked it now, but it's important to keep in mind, rate cuts are not a magic wand. There is clear evidence of weakening of economic conditions."

"That was the biggest surprise in terms of the dovishness. The market was already heading in fairly dovish and everyone did anticipate them taking out the word 'patience,'" said Leslie Falconio, senior strategist with UBS Global Wealth Management Chief Investment Office. "It was really the dot plot that came off on the dovish side."

While the markets took the Fed as dovish and ready to move, some economists stuck with their forecasts for no cuts. "If seven of them think they need to cut twice in 2019, what are they waiting for?" said Briggs. "They're going to have to follow the market...granted the majority didn't think they needed it but this is an awful fine line."

 

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