Fed's 2023 Policy Twists: The Turning Points And Markets Reactions
Portfolio Pulse from Neil Dennis
The Federal Reserve's policy decisions throughout 2023 have led to significant movements in the stock market. Despite initial expectations of a peak rate of 4.5%-4.75%, the Fed raised rates to 5.25%-5.5%. The hawkish stance in early 2023 led to a stock market dip, but as inflation rates fell and the Fed's tone softened, stocks rallied. The SPDR S&P 500 ETF (SPY) gained 21% year to date, while the Invesco NASDAQ 100 ETF (QQQM) rallied 50%. The final CPI reading for November showed inflation at 3.1%, fueling speculation that the rate-hike cycle may be over and potentially leading to easing in the spring.
December 13, 2023 | 1:30 pm
News sentiment analysis
Sort by:
Ascending
POSITIVE IMPACT
The Invesco NASDAQ 100 ETF (QQQM) has rallied 50% over the year to date, driven by a strong performance in tech stocks and market sentiment that the Fed may ease monetary policy.
QQQM's significant rally can be attributed to the recovery in tech stocks and the broader market's response to a potential peak in interest rates. With the latest CPI data and Fed commentary, investors are optimistic, which could continue to positively impact QQQM in the short term.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 80
POSITIVE IMPACT
The SPDR S&P 500 ETF (SPY) has gained 21% year to date, reflecting the stock market's recovery as the Fed's policy stance softened and inflation rates decreased.
The SPY ETF closely tracks the performance of the S&P 500, which has rallied due to a combination of falling inflation rates and a less hawkish Fed. The positive trend in the stock market and the potential end of the rate-hike cycle suggest a continued positive short-term impact on SPY.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80