Fed's Kugler Says Fed Funds Rate Determines Policy; Balance Sheet Shrinking Is Not A Key Part Of Achieving Mandates; We Are Not Celebrating, We Are Not There Yet, On 2% Inflation Goal
Portfolio Pulse from Benzinga Newsdesk
Federal Reserve's Kugler emphasized that the Fed funds rate is the primary tool for monetary policy, while balance sheet reduction is not crucial for achieving the Fed's mandates. The Fed is still working towards the 2% inflation target and is not celebrating yet.
September 25, 2024 | 9:08 pm
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The Federal Reserve's focus on the Fed funds rate as the main policy tool, rather than balance sheet reduction, suggests a continued emphasis on interest rate adjustments. This could impact SPY as it reflects broader market expectations of monetary policy.
SPY, as an ETF tracking the S&P 500, is sensitive to changes in monetary policy. The Fed's focus on interest rates over balance sheet actions suggests that future rate adjustments will be key to market movements. However, since no immediate policy change was announced, the short-term impact is neutral.
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