Fed's Powell Says Our Restrictive Stance Is Putting Downward Pressure On Economic Activity And Inflation; We Believe Our Policy Rate Is At Or Near Its Peak
Portfolio Pulse from Benzinga Newsdesk
Federal Reserve Chairman Jerome Powell indicated that the current restrictive monetary policy is exerting downward pressure on economic activity and inflation. Powell also suggested that the Fed's policy rate is at or near its peak, signaling a potential pause or slowdown in rate hikes.
December 13, 2023 | 7:37 pm
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POSITIVE IMPACT
Jerome Powell's comments on the restrictive monetary policy and the policy rate nearing its peak may lead to increased investor confidence, potentially boosting the stock market and ETFs like SPY in the short term.
As the head of the Federal Reserve, Powell's comments carry significant weight in financial markets. His indication that the policy rate is at or near its peak could be interpreted by investors as a sign that the aggressive rate hikes may slow down, which is typically positive for the stock market. This could lead to a short-term increase in the price of broad market ETFs like SPY, as it tracks the performance of the S&P 500, which often reacts positively to a dovish shift in monetary policy.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80