Fed's Logan Says Expects Gradual Rate Cuts If Economy Meets Forecasts; Fed Will Need To Be Nimble With Monetary Policy Choices; Economy Is Strong And Stable; Sees Downside Risk To Job Market, Ongoing Risks To Inflation Goal; Balance Sheet Cuts And Rate Cuts Working In Same Direction; Balance Sheet Drawdown Part Of Policy Normalization; Liquidity Still Abundant In Money Markets
Portfolio Pulse from Benzinga Newsdesk
The Federal Reserve's Logan anticipates gradual rate cuts if the economy aligns with forecasts, emphasizing the need for nimble monetary policy. The economy is strong, but there are downside risks to the job market and ongoing inflation risks. Balance sheet cuts and rate cuts are aligned, with liquidity still abundant in money markets.
October 21, 2024 | 12:56 pm
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NEUTRAL IMPACT
The Federal Reserve's potential gradual rate cuts and balance sheet reductions could impact SPY, reflecting broader market expectations. While the economy is strong, risks to the job market and inflation persist.
SPY, as an ETF tracking the S&P 500, is sensitive to Federal Reserve policies. Gradual rate cuts could support equities, but risks to jobs and inflation may offset positive impacts. The balance sheet drawdown aligns with rate cuts, maintaining liquidity.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70