Fed's Powell Says Wouldn't Be Taking A Position That ONRRP Has To Go All The Way To Zero To Start QT Wind Down; If We Get Very Strong Inflation Data And It Heads Back Up, We Will Go Slower Or Later Or Both
Portfolio Pulse from Benzinga Newsdesk
Federal Reserve Chair Jerome Powell indicated that the Overnight Reverse Repurchase Agreement (ONRRP) doesn't need to reach zero for the Fed to begin winding down its quantitative tightening (QT) program. He also mentioned that if inflation data comes in stronger than expected, leading to an uptick in inflation, the Fed may slow down or delay the QT process.
January 31, 2024 | 8:15 pm
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NEUTRAL IMPACT
Powell's comments on the potential slowing or delaying of QT based on inflation data may impact investor sentiment and market volatility, potentially affecting SPY, which tracks the S&P 500.
While Powell's comments are not directly about SPY, they are significant for the overall market sentiment. As SPY is a broad market ETF, any changes in the Fed's policy approach to inflation and QT can lead to increased market volatility and influence the direction of the S&P 500 index. However, the impact is not direct, and the market has likely already priced in various scenarios regarding the Fed's policy path.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 70