The Federal Reserve just squashed the possibility of a rate cut

Today the Federal Reserve Chairman indicated that the current low inflationary pressures may only be transitory.

This implies that the US Central Bank has backed away from cutting rates

Recent consensus was calling for a reduction in rates, so this announcement was a surprise to markets

Recent strength in both stock and bond markets can be attributed to an accomodative Central Bank

Possible repercussions from Governor Powell’s remarks are as follows:

  • Higher US dollar globally
  • Lower bond and equity prices
  • Lower commodity prices especially gold and base metals
  • Equity Sector Beneficiaries : Financial Stocks
  • Equity Sector Casualties: Gold and base metal stocks, Interest Sensitive sectors like Utilities,Reits and Consumer Staples
Posted in Blog Post.

Leave a Reply