President Logan discussed the stance of monetary policy and how the Fed's balance sheet fosters a safe and efficient liquidity environment for the U.S. banking system.
  • TheDemonBuer@lemmy.world
    1·
    7 months ago

    I would have preferred to hold interest rates steady at this week’s FOMC meeting…This economic outlook didn’t call for cutting rates.

    Maybe so, but the stock market would not have responded well if there hadn’t been a rate cut. I know that “keeping the stock market happy” isn’t one of the Fed’s mandates, but it has to have weighed on their decision. I’m sure that’s why Powell made a deliberate effort to mention that another rate cut in December is not a foregone conclusion. He doesn’t want investors to plan on another rate cut and then not get it and panic.

    Polymarket had the chances of another 25 bp cut in December at over 90%, now it’s down to 66%. I wouldn’t be surprised if we see the S&P 500 down for the month of November as a result. I know Powell said that the companies that are at the top of the AI boom aren’t especially sensitive to rates, and that’s true. Companies with trillion dollar market caps and billions in liquidity probably don’t care all that much about rates, but that might not be true of the other 490 or so companies that make up the index.

    • ryathal@sh.itjust.works
      1·
      7 months ago

      The S&P is likely going to be down in Q4 regardless of rate cuts. The shutdown and tariffs are a real negative impact. No SNAP is also bad for grocery stores as well. It’s not been a good year for crops, insurance payouts for drought afflicted crops is bad for the market. Consumer spending outlooks aren’t great either.