U.S. stock futures showed a slight uptick on Wednesday ahead of the Federal Reserve’s upcoming policy decision. Dow Jones Industrial Average futures saw a rise of 42 points or 0.1%, while S&P 500 futures and Nasdaq 100 futures climbed by 0.1% each.
Investors are eagerly awaiting the central bank’s decision on whether to maintain the current benchmark overnight borrowing rate, which is expected to remain within the range of 5.25% to 5.5%. Additionally, market participants will closely scrutinize the commentary provided by Fed Chair Jerome Powell for any indications of potential rate cuts in the near future. Currently, the CME FedWatch Tool suggests that there is a likelihood of rate cuts beginning in the spring of next year.
However, Powell might choose to push back on such expectations, especially considering the recent decrease in yields and its limited effectiveness in cooling down the economy. The 10-year Treasury yield, which reached over 5% in October, is now hovering around 4.2%.
Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, shared her perspective on CNBC’s “Closing Bell” on Tuesday, emphasizing that she will be closely observing whether Powell contradicts his previous statement about yields having a tightening effect on the economy.
Source (CNBC)
