Fed's Musalem Says He Needs To Observe Period Of Favorable Inflation, Moderating Demand And Expanding Supply Before He Will Have Confidence For An Interest Rate Cut; These Conditions Could Take Months And More Likely Quarters To Play Out; If Inflation Becomes Stuck Meaningfully Above 2% Or Moves Higher, He Would Support Additional Policy Tightening
Portfolio Pulse from Benzinga Newsdesk
Fed's Musalem indicates that he needs to see a period of favorable inflation, moderating demand, and expanding supply before considering an interest rate cut. These conditions could take months or quarters to materialize. If inflation remains significantly above 2% or increases, he would support further policy tightening.
June 18, 2024 | 5:22 pm
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Fed's Musalem's comments suggest that interest rate cuts are unlikely in the near term, which could impact market sentiment and the performance of SPY. If inflation remains high, further tightening could negatively affect SPY.
Musalem's stance on needing favorable economic conditions before considering rate cuts suggests a prolonged period of higher interest rates. This could negatively impact SPY as higher rates generally lead to lower stock prices.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 80