The bulls are in charge as markets pump ๐๐
But can J Pow really stick that Goldilocks landing to secure that full-on bull market?
What you should know ๐
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Bulls appear to be firmly in control as the market prices in the โGoldilocksโ landing scenario following Wednesday's major rate cut announcement.
Whatโs the Scoop?
โ๏ธ Fed Cuts: Wednesday, Americaโs Federal Reserve announced a 50 bps (0.5%) decrease to its benchmark short-term policy rate in the central bankโs first instance of monetary easing during the post-Covid era.
๐ Volatile Regime: While markets initially rallied on confirmation of the telegraphed Fed cuts, they gave back the gains headed into the U.S. close and finished out that first day red. Although the bullish impulse from Fed cuts didnโt transpire until after the close, the broad market S&P 500 opened 1.5% higher today, the indexโs strongest overnight gain since 2022 and its largest gap up opening to new all-time highs in at least 35 years.
๐ผ Achieving Goldilocks: High interest rates were tough on the economy, but they were seen as necessary to control the big inflation that hit in 2022. Now that inflation has slowed down a lot in recent months, the Fed can start easing up on its monetary policies. Despite some softening in the labor market, numbers aren't pointing to imminent disaster, and global central bankers remain supremely confident they can keep unemployment from rising too much without causing more inflation through carefully calculated interest rate cuts.
๐ข Bankless Take: The best mix of conditions seems to be coming together, boosting economic optimism and giving the green light for bulls to push markets to new all-time highs. While investors will see tanking inflation data as bullish and shrug off deteriorating labor conditions in the weeks ahead thanks to renewed confidence in the Fed Put, an unexpected turn for the worse will swiftly give way to serious recession concerns.
Analysis by JackInabinet
But can J Pow really stick that Goldilocks landing to secure that full-on bull market?
What you should know ๐
========================================
Bulls appear to be firmly in control as the market prices in the โGoldilocksโ landing scenario following Wednesday's major rate cut announcement.
Whatโs the Scoop?
โ๏ธ Fed Cuts: Wednesday, Americaโs Federal Reserve announced a 50 bps (0.5%) decrease to its benchmark short-term policy rate in the central bankโs first instance of monetary easing during the post-Covid era.
๐ Volatile Regime: While markets initially rallied on confirmation of the telegraphed Fed cuts, they gave back the gains headed into the U.S. close and finished out that first day red. Although the bullish impulse from Fed cuts didnโt transpire until after the close, the broad market S&P 500 opened 1.5% higher today, the indexโs strongest overnight gain since 2022 and its largest gap up opening to new all-time highs in at least 35 years.
๐ผ Achieving Goldilocks: High interest rates were tough on the economy, but they were seen as necessary to control the big inflation that hit in 2022. Now that inflation has slowed down a lot in recent months, the Fed can start easing up on its monetary policies. Despite some softening in the labor market, numbers aren't pointing to imminent disaster, and global central bankers remain supremely confident they can keep unemployment from rising too much without causing more inflation through carefully calculated interest rate cuts.
๐ข Bankless Take: The best mix of conditions seems to be coming together, boosting economic optimism and giving the green light for bulls to push markets to new all-time highs. While investors will see tanking inflation data as bullish and shrug off deteriorating labor conditions in the weeks ahead thanks to renewed confidence in the Fed Put, an unexpected turn for the worse will swiftly give way to serious recession concerns.
Analysis by JackInabinet
3 months ago
