Dovish Powell & Rate Cut in July? Can Market Climb Higher?
At the just-concluded congressional hearing, Federal Reserve Chair Jerome Powell did not directly respond to whether there will be a rate cut in July, repeatedly emphasizing that “we need more data.”
Powell stated that the Fed is currently staying put in part because they anticipate that tariffs may push inflation higher. However, he also admitted that the impact might ultimately not be as severe as the market fears. He hinted that if future data shows inflation is weaker than expected or if the labor market starts to weaken the Fed does not rule out the possibility of cutting rates earlier.
Specifically on inflation data, he mentioned that the Fed’s preferred measure, the PCE price index, may rise to 2.3% in May, with core PCE rising to 2.6%, a slight increase from April’s 2.1% and 2.5%. But he also pointed out that historically, tariffs typically cause only a one-time increase in prices, which is unlikely to create sustained inflationary pressure.
S&P 500: Can it keep rising, or is it time for a break?
In this market environment where “cut or not, it’s fine either way,” $S&P 500(.SPX)$ has already climbed back to its pre–trade war highs.
According to data from CME Group, the market currently prices in only a 23% probability of a Fed rate cut in July, with September being the more likely timing.
Wall Street’s average target for the S&P 500 is currently at 5,939 points, with the highest estimates reaching 6,350. Whether this range can be broken largely depends on inflation data, employment conditions, and the Fed’s next moves over the next two months.
However, since Powell’s term ends in May next year, the market has started betting that a new Fed chair will pursue more aggressive rate cuts.
Is the S&P 500 too high this year?
Does this “cut or not, either is fine” situation mean the market lacks upward momentum?
Will it take until next year to break new highs or could it happen this year?
The market is sitting near record highs, how do your position look like?
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According to data from CME Group, the market currently prices in only a 23% probability of a Fed rate cut in July, with September being the more likely timing.
Is the S&P 500 too high this year?
Does this “cut or not, either is fine” situation mean the market lacks upward momentum?
Will it take until next year to break new highs or could it happen this year?
The market is sitting near record highs, how do your position look like?
REWARDS
All valid comments will receive 5 Tiger Coins
Tag your friends to win another 5 Tiger Coins
I believe that the breaking of new highs will happen this year and continue to break till early next year till the euphoria dies off.
As the market is currently expensive, I am reluctant to enter in big positions. I mainly nibble a bit to take advantage of the expected rise later this year and keep some cash to average down if that expectation does not materialise.
@Kaixiang @Wayneqq @HelenJanet @DiAngel @SPOT_ON @SR050321 @Universe宇宙 @LuckyPiggie @Success88 @Fenger1188 come join
Personally, I’ve trimmed a bit of my positions near the highs to lock in gains but still hold a decent core, especially in tech and ETFs. If we get softer inflation or labor data in July or August, that could reignite bullish momentum and push the S&P 500 past 6,000 even before year-end. Otherwise, we might consolidate until there’s clearer direction from the Fed or a leadership change in 2025.
Overall, I’m staying flexible. I don’t think the market is too high, but it’s definitely more sensitive now to policy and data.
@Tiger_comments @TigerStars
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"Based on current economic indicators and the Federal Reserve's ongoing stance on inflation control, I predict that U.S. interest rates will remain unchanged for the foreseeable future. With inflation still above target and global uncertainties lingering, the Fed is likely to maintain its cautious approach. This will allow them to continue monitoring economic growth while ensuring that inflationary pressures are kept in check. The outlook suggests stability, but all eyes will be on any data that might trigger a policy shift.
Powell任期到明年5月结束，市场已经开始押注下一任联储主席可能会更偏鸽，这种预期确实让利率路径出现更多想象空间。但说实话，“降息也好、不降也无妨”的行情，其实反映的是资金没有明确方向感。一方面怕通胀粘性高，另一方面又怕错过牛市列车。典型的“边走边看”。
我自己目前的仓位偏中性偏多，核心还是抱紧一些高质量科技和指数ETF，同时在防御板块（比如消费、医疗）做了一些对冲。因为我判断，要再创历史新高，可能不一定要等到明年，但一定要有一根“催化剂”，比如CPI大幅下行、降息落地，或者Q3财报超预期。
现在的位置，不适合All in，但也不该空仓观望。市场虽然贵，但不是泡沫；拉回就是机会，继续低吸高质资产。
So what should investors do?
Investors should stay sharp, stay selective and stay diversified.
This is a market for thoughtful positioning and staying agile with cash reserves to capitalise on pullbacks.
@Tiger_comments @TigerStars @CaptainTiger @CaptainTiger
鮑威爾表示，美聯儲目前按兵不動，部分原因是他們預計關稅可能會推高通脹。不過，他也承認，影響最終可能不會像市場擔心的那麼嚴重。他暗示，如果未來數據顯示通脹弱於預期，或者勞動力市場開始走弱，美聯儲不排除提前降息的可能性。