Lewis Krauzkpef
New York (Reuters)-American shares markets, returned by President Donald Trump on foreign imported tariffs, is facing a meeting of federal reserves in the next week, as investors seek hints of further reduction in interest rates that could bring a little calm calm to markets.
The weekly slide in stock has accelerated in recent days, and on Thursday, Benchmark S&P 500 confirmed that it was in correction, which ended over 10% compared to the record maximum on February 19. While the supplies ended the week on a positive note, with S&P 500 he recovered abruptly on Friday, the fall wiped out more than $ 4 market values, and some of the highest flyers on Wall Street, such as Nvidia and Tesla, became Puma.
The last meeting of the Fed monetary policy comes because Wall Street is increasingly concerned about economic slowdown, with concern worse by increasing his tariff war.
The US Central Bank is expected to hold interest rates on Wednesday, but investors expect to reduce later in the year and seek signs that the FED can prepare for movement.
“The stock market is trying to get any type of insight on when the FED will be comfortable enough to implement its next reduction of the rate,” said Dominic Pappalardo, a major strategist with multiple assets in Morningstar Wealth. “I don’t think the title of title and new policies coming from the White House will stop soon.”
The prospects for reducing the rate this week have encouraged an incentive for consumer prices, which have brought a bit of relief regarding inflation. The pace of inflation has been cooled since 2022 when the FED began its cycle to reach a rate, and although it remains above the 2% of the annual goal of the central bank, the recent disappointing economic data could begin to accept more prominence.
“The first step that the stock market would like to see from (FED) is to signal that the focus is returned back to the support of economic activity far from the inflation struggle,” Pappalardo said.
Investors in the past month have increased the bets of more facilitating this year, and Fed Furers Futures indicates almost three decreases in a quarter of points expected by 2025, compared to the current rate of 4.25%-4.5%, according to LSEG.
The comments of President Fed Jerome Powell will be crucial at his press conference after a decision on monetary policy is announced.
“The market has been reconsidering the FED in the last few weeks,” said Walter Todd, the Chief of Investment Director in Greenwood Capital. “If he gets strongly against that re -price we had in the future market, that could be problematic.”
