FOMC Minutes Preview: How Will Markets React To Fed's Rate Clarity?
Portfolio Pulse from Piero Cingari
Investors are awaiting the release of the minutes from the latest Federal Open Market Committee (FOMC) meeting, where a 0.25% rate hike was implemented. The focus is on whether this marks the Fed's final rate hike and how long the rates will remain at their current levels. Market sentiment indicates that the Fed will avoid further rate hikes, with Fed futures signaling a 90% probability of this outcome in the September meeting. The SPDR S&P 500 ETF Trust (NYSE:SPY) and the Invesco QQQ Trust (NASDAQ:QQQ) could extend their recent declines if the minutes reveal a risk of further rate hikes.
August 15, 2023 | 7:48 pm
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NEGATIVE IMPACT
The Invesco QQQ Trust could extend its recent declines if the FOMC minutes reveal a risk of further rate hikes.
The QQQ ETF is directly tied to the performance of the NASDAQ 100, which is sensitive to changes in the Federal Reserve's monetary policy. If the minutes reveal a risk of further rate hikes, this could lead to a sell-off in the stock market, negatively impacting QQQ.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The SPDR S&P 500 ETF Trust could extend its recent declines if the FOMC minutes reveal a risk of further rate hikes.
The SPY ETF is directly tied to the performance of the S&P 500, which is sensitive to changes in the Federal Reserve's monetary policy. If the minutes reveal a risk of further rate hikes, this could lead to a sell-off in the stock market, negatively impacting SPY.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80