Market Volatility and Fed's Outlook

That certainly seemed the case this past week, with the market trading being fairly sloppy. Attempts to push the market higher were repeatedly met with sellers, and we saw a rotation from over-owned to under-owned assets. Notably, that selling pressure arrived as expected, and while such could persist until early next week, we should be getting close to the end of the distribution and rebalancing process.

The good news is that the recent consolidation paves the way for 'Santa Claus to visit Broad and Wall.” That process continued as expected this past week but became violent on Wednesday following the Federal Reserve meeting. While the Fed cut rates as expected, the market shock came from the lift in its outlook for interest rates in 2025 by a half percentage point. The market is assuming that the Fed is giving up on the idea that inflation will return to the 2% target next year, an idea that they had confidence in as recently as September. That more hawkish outlook undermined the view that elevated valuations were justified by easier monetary conditions, which now seems to be reversing. We suspect that this view is rather short-sighted, and given the economic dynamics both abroad and in the U.S., slower economic growth will lead to a The markets also struggled with concerns about a Government shutdown. As we discussed in “What is critical to understand about Government shutdowns is that mandatory spending (social security, welfare, interest on the debt) continues as needed. Such is why it mainly involves Government employment and the shuttering of national parks and monuments. According to Goldman Sachs, the shutdown would have only impacted about 2% of Federal spending overall. Notice that the vast majority of Government spending is directly a function of the social welfare system and interest on the debt

Malaysia Malaysia Latest News, Malaysia Malaysia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Fed Rate Cut Expected, But Hawkish Tone May Trigger Market VolatilityThe Federal Reserve is widely anticipated to cut interest rates by 0.25 percentage points on Wednesday. Investors will closely watch the Fed's statement and Chair Jerome Powell's press conference for clues about future monetary policy. Analysts predict a hawkish tone, potentially leading to market volatility.
Source: NBCDFW - 🏆 288. / 63 Read more »

Fed Rate Hike Sparks Market VolatilityThe Federal Reserve's surprise interest rate hike sent shockwaves through global markets, causing a sell-off in stocks and a surge in the value of the US dollar.
Source: CNBC - 🏆 12. / 72 Read more »

USD/JPY: Fed and BoJ Decisions to Ignite FX Market VolatilityForex Analysis by David Scutt covering: US Dollar Japanese Yen, US Dollar Index Futures, United States 2-Year, United States 10-Year. Read David Scutt's latest article on Investing.com
Source: Investingcom - 🏆 450. / 53 Read more »

Stock Market Plummets After Fed Rate Cut, Experts Warn of VolatilityThe Dow Jones Industrial Average and the S&P 500 experienced significant losses following the Federal Reserve's announcement of a quarter-percentage-point interest rate cut. The market selloff, which marked the Dow's 10th consecutive day of losses, raised concerns about future market performance.
Source: ABC - 🏆 471. / 51 Read more »

Fed Rate Cut Fuels Market VolatilityCNBC Daily Open reports on the impact of the Federal Reserve's recent rate cut on global markets. Despite the anticipated move, investors reacted sharply to the Fed's forecast of tighter monetary policy in 2025.
Source: nbcchicago - 🏆 545. / 51 Read more »

Fed Expected to Cut Rates, But Hawkish Tone May Trigger Market VolatilityThe Federal Reserve is widely anticipated to cut interest rates by a quarter point on Wednesday, but investors are bracing for a potentially hawkish message from policymakers that could trigger market volatility.
Source: NBCNewYork - 🏆 270. / 63 Read more »