Analyst: The market is focusing on whether the Federal Reserve will pause rate hikes in January next year and how to convey a potential shift in "hawkish rate cut" attitudes
Stephen Innes, an analyst at SPI Asset Management, said that although market participants generally believe that further interest rate cuts and strong earnings growth will coexist, these factors are not necessarily interdependent.
People generally expect the Federal Reserve to cut interest rates by 25 basis points, but the trend afterwards is still unclear. Regardless, the subsequent trends of the dollar, stock market and bond market largely depend on the guidance soon to be issued by the Federal Reserve rather than Wednesday's rate cut itself. The key question is whether or not the Fed will signal a pause in raising rates at its FOMC meeting in January next year. I tend to affirm this view. However, the real focus is on how clearly and effectively the Fed can communicate this potential shift and confirm "hawkish rate cuts".
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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