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Powell’s Warning: What’s Next After the Surprise 0.5% Rate Cut?
Manage episode 442389635 series 3604010
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In this episode (September 18), we’ll discuss:
Why were the markets so volatile after the Fed’s 0.5% rate cut?
The Fed's surprise 0.5% rate cut sparked an initial rally, but stocks pulled back when Powell signaled that future cuts may come at a slower pace. Despite this, small-cap and cyclical stocks still managed to outperform.
What’s happening with bond yields and oil prices?
Despite the rate cut, bond yields rose slightly, while oil prices dropped to $70 a barrel, which could act as a boost for consumer spending in the near future. Lower oil prices may be a welcome relief for the economy.
Why did the Fed cut rates, and what’s the outlook?
The Fed cut rates to 4.75%-5.0%, its first reduction in four years, with a goal of supporting employment as inflation approaches the 2% target. More cuts are expected, but the outlook suggests a gradual easing over time.
What does this mean for the stock and bond markets moving forward?
With no recession anticipated, cyclical stocks could continue to perform well. Lower rates are likely to lead to positive bond returns, particularly for medium- to long-term investments.
#MarketVolatility #FedRateCut #PowellSpeech #StockMarketNews #CyclicalStocks #BondMarket #OilPrices #ConsumerSpending #InvestmentOutlook #FinancialNews
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