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Markets seem to be rejecting the central bank’s more pessimistic stance on inflation, as noted by S.
By Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Michael J. Los Angeles’ Merced, Lauren Hirsch, Ephrat Livni, Benjamin Mullin and Vivienne Walt
Bull market rally continues jueves. la s
The gap between investors and the central bank is widening again. After Wednesday’s tepid release of the customer value index, the futures market’s chances of two interest rate cuts this year increased, a prospect that sparked a buying frenzy in stocks and bonds.
Not so fast? The Federal Reserve’s dot plot projection released Wednesday foresees only one cut this year, compared with three previous forecasts, as policymakers worry that inflation will remain above their convenience levels. This makes the Federal Reserve more aggressive than other central banks, especially those in Europe, which are expected to cut loan prices several times this year. The White House has largely lost hope of a similar situation.
Jay Powell, the chairman of the Federal Reserve, tried to temper expectations at Wednesday’s press conference. He reiterated that inflation remained above the central bank’s 2% target and that the purchasing power of U. S. families had declined over the past two years. He added that untimely relief “could end up destroying a lot of the smart stuff. “
Market watchers don’t think so. Wednesday’s CPI showed that Jstomer costs rose in May to their lowest point in three years. Given this, the Fed’s forecast for a one-time cut “seems to be too gloomy a view of inflation progress,” Charlie Ripley, investment strategist at Allianz Investment Management. , he wrote in a note from Jstomer.
Bullish sentiment is dominating the markets. The S-index
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