Powell Stresses Need For 'More Data' Before Considering Rate Cuts, Downplays Recession, Commercial Real Estate Risks
Portfolio Pulse from Piero Cingari
Federal Reserve Chair Jerome Powell emphasized the need for more data before considering rate cuts and downplayed recession and commercial real estate risks. Powell noted progress in controlling inflation and achieving low unemployment rates. He mentioned the Fed's median preference for three rate cuts in 2024 but dismissed recession fears, citing last year's growth and solid forecasts. Powell addressed commercial real estate concerns, especially among medium and small-sized banks. Following his remarks, the U.S. Dollar Index fell, while stocks, small caps, and gold prices rose.
March 06, 2024 | 5:02 pm
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POSITIVE IMPACT
SPDR Gold Trust (GLD) reached new record highs at $2,150/oz, as Powell's remarks and lower Treasury yields increased gold's attractiveness.
Lower Treasury yields and Powell's remarks increased gold's appeal as a safe-haven asset, driving up the price of GLD.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
The iShares Russell 2000 ETF (IWM) experienced a 1% increase, outperforming larger-cap peers, following Powell's optimistic economic outlook.
The optimistic economic outlook presented by Powell led to a boost in investor sentiment, particularly benefiting small caps tracked by IWM.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) rose 0.8% as Powell's comments boosted investor confidence, leading to an uptick in stock prices.
Powell's dismissal of recession fears and positive economic indicators led to increased investor confidence, positively impacting SPY.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) saw a decline of 0.5% following Powell's remarks on needing more data before considering rate cuts.
Powell's cautious stance on rate cuts and positive economic outlook led to a decrease in demand for the U.S. Dollar, impacting UUP negatively.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90