Suhayl Rouag’s Post

🚨Ready for a high-for-longer rate environment? This week’s main event will be Federal Reserve Board Chair Powell’s press conference shortly after the release of the quarterly update of the Fed's dot plot and the May Consumer Price Index (#CPI). 🧭 Although the #Fed's decision to keep interest rates unchanged in June is fully priced in, prepare for more financial market volatility still - as investors react to the news 🤯 Despite the large swings, #Treasury yields could end the week right back where they started, but a stronger than expected #inflation report could send yields higher⚡️ ➡️ The Fed’s dot plot which includes projections for real GDP, unemployment, and inflation, as well as policymakers' views about the most appropriate course for monetary policy is likely to reflect what we ALREADY know - stronger than previously anticipated real GDP, a slower path to 2% inflation and just one or two rate cuts before the end of this year. ➡️ Headline inflation – measured by the CPI – was up 3.4% in April compared to April 2023. Core inflation was up 3.6% over the previous 12-month period. Similarly to the wage increase, core consumer prices also advanced 0.3% in April. But dwindling savings and rising debt servicing costs point to further disinflation ahead. Don't rule out a downshift in the next inflation prints! 📈After a hotter than expected #jobs report, Treasury yields and #mortgage rates rebounded sharply at the end of the week, stocks fell. If inflation also comes in hot then yields could continue to climb to undo all of the easing in #financial conditions of the past two weeks. 🔥

🚨 Fed's Bold Move: First Rate Cut Since 2020! 🚨 The Federal Reserve just made a big decision by slashing interest rates by 50 basis points. Here's what it means: 1️⃣ Interest Rates Down: First 50 bps cut in 3 years! 2️⃣ More Cuts Coming: Two more 25 bps cuts are expected in 2024. 3️⃣ Dissent in the Ranks: One Fed governor wanted a smaller cut – first dissent since 2005! 4️⃣ Inflation Outlook: Fed’s feeling confident inflation is cooling towards its 2% goal. 5️⃣ Stay Tuned: Future moves will depend on economic data. 6️⃣ Long-Term View: Expect further cuts of 100 bps in 2025 and 50 bps in 2026. 🗣 Jerome Powell says: We don’t think we’re behind on policy. We think this is timely. You can take this as our commitment to not fall behind. 👉 What's next? Analysts are split on whether the RBI will follow suit in October or hold off till December. #FedUpdate #InterestRateCuts #EconomyShifts #InflationWatch #GlobalMarkets

A moderately high inflationary environment can offer a good mise en scène for boosting corporate profits and pushing stock prices up. Historically, annual inflation rates between 3-4% - which we have now - have been followed by an average return on 8.2% in the S&P 500. And when inflation has cooled within its 2-3% target, the return leaps up to 13.6%.

BREAKING 🚨 The Federal Reserve has cut interest rates by 50 basis points in their first rate cut since March 2020 The long awaited "Fed pivot" has officially begun... By starting their #monetarypolicy easing cycle with an aggressive 50 basis points rate cut it seems that the #fed decided to focus on the labor market part of their dual mandate rather than the #inflation one... Here's a summary of #Fed decision: 1. Fed cuts interest rates by 50 bps for first time since 2020 2. Fed sees 2 more 25 basis point rate cuts in 2024 3. One Fed governor dissented for the first time since 2005 in favor of a 25 bps rate cut 4. Fed gained "greater confidence" that inflation is moving to 2% 5. Fed will "carefully asses incoming data" and evolve outlook 6. Fed sees 100 bps of rate cuts in 2025 and 50 bps of cuts in 2026 This is a CLEAR Fed pivot and the Fed is signaling that they believe inflation is sustainably moving to 2%. The Fed is now making unemployment their top priority as the labor market has weakened. Their decision sounds almost like a risk management one. Market reaction >>> -> The #SP500 rises to a new all time high but the #equity market reaction is rather mixed so far -> #Yieldcurve steepens with a modest #yield rise on the long-end -> The #dollar weakens #Gold and #bitcoin slightly rise

BREAKING 🚨 The Federal Reserve has cut interest rates by 50 basis points in their first rate cut since March 2020 The long awaited "Fed pivot" has officially begun... By starting their #monetarypolicy easing cycle with an aggressive 50 basis points rate cut it seems that the #fed decided to focus on the labor market part of their dual mandate rather than the #inflation one... Here's a summary of #Fed decision: 1. Fed cuts interest rates by 50 bps for first time since 2020 2. Fed sees 2 more 25 basis point rate cuts in 2024 3. One Fed governor dissented for the first time since 2005 in favor of a 25 bps rate cut 4. Fed gained "greater confidence" that inflation is moving to 2% 5. Fed will "carefully asses incoming data" and evolve outlook 6. Fed sees 100 bps of rate cuts in 2025 and 50 bps of cuts in 2026 This is a CLEAR Fed pivot and the Fed is signaling that they believe inflation is sustainably moving to 2%. The Fed is now making unemployment their top priority as the labor market has weakened. Their decision sounds almost like a risk management one. Market reaction >>> -> The #SP500 rises to a new all time high but the #equity market reaction is rather mixed so far -> #Yieldcurve steepens with a modest #yield rise on the long-end -> The #dollar weakens #Gold and #bitcoin slightly rise

Hold on to your caps 🧢, because the latest inflation data was released and it’s a game changer. The initial projections were absolutely smashed by the actual data, and interest rates felt the boom. You can expect some serious turbulence over the upcoming week. The probability of a first rate cut by the Fed decreased and was pushed back. Most experts think rate cuts will now possibly begin in July. The original train of thought was that the Fed will cut rates 3 times this year, but now that number has dipped to 1.9 cuts due to the hot data. We should get some more clarity when the Fed speaks on April 30th-May 1st. #rates #cuts #ratecuts #thefed #cpi #inflation #market #markets #mortgagemarket #finance #homefinance #homebuying

Nothing in this article provides any confidence that the Fed has any type of handle on what is happening with the economy/inflation or where we are headed... 🤪 Definitely not bullish for any kind of rate cut this year... https://lnkd.in/e-BEwDYZ