Fed Signaled A March Cut Is Unlikely 🧐
The S&P 500 slid 1.6% in its worst day since September. The Nasdaq Composite lost 2.2%, its worst session since October. Those losses come after Powell in his post-meeting conference discouraged investor hopes for a rate cut as soon as March, sending equities tumbling.
⚠️ Trading tips: looking at SPY calls above 486.2 and puts under 482.7 on Thursday after jobs data and ISM numbers at 8:30am and 10am respectively. Expecting a chop day as market awaits earnings from AAPL, META & AMZN after hours.
Oversold but low can go lower 😉
The Federal Reserve announced on Wednesday that interest rates will remain unchanged, meeting market expectations and signaling a pause in policy tightening.
Yet the Fed statement tempered expectations for imminent rate cuts, stating that “it won’t be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”
Fed Chair Jerome Powell highlighted the current economic situation at his press conference: “Inflation has eased from its highs without a significant increase in unemployment.”
Despite this improvement, Powell emphasized the ongoing challenge. “It’s still too high and ongoing progress in bringing it down is not assured and uncertain.” He aimed to reassure the public, saying: “I want to assure the American people that we are fully committed to returning inflation to our 2% goal.”
Buy call #1
Buy call #2
Discussing the recent drop in inflation, Powell stressed the importance of sustained progress and welcomed the reduced inflation rates in the latter half of last year, but said the Fed needs “to see continuing evidence to build confidence that inflation is moving down sustainably” towards the the goal.
“If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.” He quelled speculations of imminent rate cuts, saying “reducing policy restraint too soon or too much could reverse inflation progress.”
The Fed chair stressed that decisions will be made on a meeting-by-meeting basis.
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