American financial markets are breaking records as interest rate cuts are anticipated.

The “S&P 500” breaches the 5200 point barrier, marking an unprecedented new high.

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Evaluating the Federal Meeting

Market performance

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American stocks saw a massive leap, reaching new record levels following signals from the Federal Reserve about its direction towards reducing interest rates for the first time since the onset of the pandemic crisis. In a significant shift, the “S&P 500” index crossed the 5200 point threshold amid expectations that the end of the Federal Reserve’s more aggressive monetary tightening policy of this generation will continue to boost the profits of American companies.

This increase was almost broad-based, with stock prices of sectors that had lagged this year, such as small-cap stocks, also rising. Short-term Treasury bonds outperformed, as traders now see a higher likelihood of an interest rate cut in June. Federal officials maintained their forecasts for three interest rate cuts during the current year, signaling a move towards slowing the pace of reducing the central bank’s bond holdings, in addition to hinting that they are not disturbed by the recent rise in inflation.

While continuing to highlight the officials’ desire to see more evidence of price declines,
Federal Reserve Chair Jerome Powell also said it would be appropriate to start easing monetary policy “sometime this year.
” Chris Zaccarelli from the “Independent Advisor Alliance” noted that “Overall,
the takeaway from the press conference is that the absence of new news is news in itself,
meaning the markets still have the green light to continue rising…

This Federal Reserve will not stand in the way of the market’s uptrend.
” The “Nasdaq 100” index rose by 1.2%, driven by strong revenue forecasts from “Micron Technology” thanks to the increasing demand for artificial intelligence devices.
The yield on two-year bonds dropped seven basis points to 4.6%, and the dollar’s exchange rate declined.

Evaluating the Federal Meeting

From Wall Street’s perspective, the recent Federal meeting was assessed.
Krishna Guha from “Evercore” considers that the markets did not experience significant fluctuations following this meeting,
with Federal Chair Powell continuing a cautious approach supportive of stock prices,
stemming from the initial release of Federal data.
The primary message is that the Federal is keen to cut interest rates but is waiting for the right time to do so responsibly,
maintaining its plans for three rate cuts during the current year starting from June.

Peter Boockvar sees Powell leaning towards easing today,
indicating that even a strong job market would not halt the beginning of interest rate cuts,
which led to the decrease in short-term bond yields.

Sonu Varghese from “Carson Group” speaks of a complete leaning towards monetary easing,
leaving the door open for interest rate cuts even amid expectations of a slight increase in inflation and further economic growth.

Neil Birrell from “Premier Miton Investors” emphasizes the Federal’s effort to achieve a smooth economic downturn,
while Sima Shah from “Principal Asset Management” points out that the Federal is willing to risk cutting interest rates even before getting closer to the inflation target, which carries potential risks. Whitney Watson from “Goldman Sachs Asset Management” sees major central banks heading towards interest rate cuts in the coming months, benefiting high-quality fixed income bonds.

Michelle Cluver from “Global X” considers the recent data very encouraging,
increasing the likelihood of the Federal cutting interest rates in June,
while Jason Pride from “Glenmede” emphasizes that patience is currently the Federal’s preferred strategy,
keeping a continuous focus on inflation.

Christian Hoffman from “Thornburg Investment Management” cautions that fixed income will continue to move between expectations of lower interest rates,
which is good for bonds.

Market performance:

“S&P 500” increased by 0.9%
“Nasdaq 100” rose by 1.2%
“Dow Jones” went up by 1%
The immediate Bloomberg dollar index fell by 0.4%
“Bitcoin” price increased by 3.1%
The value of “Ether” rose by 2.9%
The spot gold price climbed by 1.2%

American financial markets are breaking records as interest rate

American financial markets are breaking records as interest rate

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