Fed's Mester Says Do Anticipate We'll Be In A Position To Lower Fed Funds Rate Later This Year; Says My Long-Term Neutral Estimate Was Raised To 3% From 2.5% In Last Month's Seps
Portfolio Pulse from Benzinga Newsdesk
Fed's Mester anticipates a potential reduction in the Fed Funds Rate later this year, despite raising her long-term neutral estimate to 3% from 2.5% in the last month's Summary of Economic Projections (SEPs).
April 04, 2024 | 6:14 pm
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POSITIVE IMPACT
The anticipation of a Fed Funds Rate cut could lead to a positive short-term impact on SPY, reflecting investor optimism.
The potential reduction in the Fed Funds Rate typically leads to lower borrowing costs, encouraging investment and spending. This can result in a positive market sentiment, which is likely to be reflected in broad market indices like SPY. However, the impact is moderated by the fact that the long-term neutral rate estimate was raised, indicating a cautious approach to monetary policy.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80