U.S. stock futures saw a slight increase on Wednesday as investors eagerly awaited the latest policy decision from the Federal Reserve (Fed). Dow Jones Industrial Average futures went up by 75 points, equivalent to a 0.1% rise, while both S&P 500 futures and Nasdaq 100 futures increased by 0.2%.
Although the consensus is that the central bank will maintain the benchmark overnight borrowing rate at a steady range of 5.25% to 5.5%, market participants are keen on analyzing the comments made by Fed Chair Jerome Powell for indications of potential rate cuts in the near future. Currently, the CME FedWatch Tool indicates that the market is pricing in the likelihood of rate cuts starting in the coming spring.
It is possible, however, that Powell may oppose this scenario, particularly as Treasury yields are subsiding on their own. Since reaching a peak of 5% in October, the 10-year Treasury yield has now fallen to 4.2%. Liz Ann Sonders, the chief investment strategist at Charles Schwab, stated on CNBC’s “Closing Bell” program that Powell might suggest that these falling yields are already playing a part in the prospective easing of monetary policy.
“I’m going to focus on whether he does the opposite of what he did when he stated that the increase in yields had already tightened conditions for the Fed,” Sonders added.
Source (CNBC)
