Friends
As expected the Federal Reserve lowered the Fed Funds rate one quarter of a point. The new range is 4.00 to 4.25%. The Fed Chair indicated that the risk has shifted to the weakening labor market, but made it clear that there is no risk free path forward. In other words, they will continue to juggle the dual mandate’s risk of inflation and a softening labor market.
Stocks were mixed, which was not a huge surprise. By the close, the Dow Jones Industrial Average was up 260 points to finish the day at 46,018. The S&P 500 was down 6 points to close at 6,600. The Nasdaq Composite Index was down 72 points to close at 22,261. Gold was down $30 to trade at $3,695 per ounce, while oil was down $.60 to trade at $63.92 per barrel WTI.
The bond market did little after the announcement. The 10-year Treasury Note actually saw its yield tick a little higher. So if today’s monetary policy change by the Fed was basically priced into stocks and bonds then where do we go from here? If you’re a “don’t fight the Fed “ believer, then given the direction the Fed Funds rate is heading, stocks should do well into year end. But it you believe that the Fed’s policy shift has been well accounted for by the markets you might be more cautious here. Well, that’s what makes a market I guess.
Have a nice evening everyone.
