U.S. stocks showed little movement on Wednesday as investors eagerly awaited the Federal Reserve’s latest policy decision. The central bank is widely expected to keep the benchmark overnight borrowing rate stable within the range of 5.25% to 5.5%. However, market participants will closely analyze Fed Chair Jerome Powell’s remarks for any indications regarding the timing of potential rate cuts. Currently, the CME FedWatch Tool suggests that the markets have priced in the likelihood of rate cuts starting in the spring of next year.
However, Powell may choose to challenge this scenario, particularly since Treasury yields have undergone a decline on their own. After reaching 5% in October, the 10-year Treasury yield has dropped to 4.2%. Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, believes that Powell may suggest that this decline in yields is already having an easing effect. She shared her thoughts on CNBC’s “Closing Bell” on Tuesday, stating, “That’s, to me, what I’m going to be focused on, is whether he sort of does the opposite of what he did when he said that the move up in yields had done some of the tightening for the Fed.”
Additionally, futures trading remained steady amid new inflation data. According to the U.S. Bureau of Labor Statistics, the producer price index remained unchanged in November after a 0.4% decrease in October, which was slightly different from the forecasted rise of 0.1% by economists polled by Dow Jones.
Source (CNBC)
