Friends
As we expected the Fed paused today, in other words they kept rates the same. Again, not a surprise and it also wasn’t a surprise that the statement was filled with hawkish commentary. The Fed kind of wants to stop raising rates but they don’t want you to know that. They want to appear credible, that they are ready to continue to fight inflation in the coming months, but I believe that they hope that future data will allow them to stop for this cycle. So, if actions speak louder than words then the Fed told us they just might be done raising rates. We’ll see.
As for the markets, the bond market gyrated and stocks fell initially, rallied, and then dipped then ended higher (except the Dow which was weighed down by one stock – United Health. By the close, the Dow Jones Industrial Average was down 232 points to finish the day at 33,979. The S&P 500 was up 3 points to close at 4,372. The Nasdaq Composite Index was up 53 points to close at 13,626. Gold was up $1 to trade at $1,960 per ounce, while oil was down $.69 to trade at $68.73 per barrel WTI.
Again, the Fed is “indicating” that future rate hikes may still be necessary and that those expecting/hoping for rate cuts later this year are going to simply be out of luck. In the meantime, we continue to have an inverted yield curve, a slowing economy (though only marginally at this point), and waning inflation. It will be fascinating to see how stocks react in the coming weeks. Stay tuned.
Have a nice evening everyone.
