Notably, for the first time this year, markets are now only forecasting three interest rate cuts in 2024. It is also the first time markets have aligned with the Federal Reserve’s latest guidance.
The actions in Wall Street are rising on Monday ahead of a week marked by meetings of central banks around the worldwhich could give indications of where interest rates are going.
He S&P 500 gains 1.1% and is close to its all-time high set at the beginning of last week, while Nvidia and other big tech stocks drive that pathwhich already seems to be the general routine of the leading index.
He Dow Jones Industrial Average rises 144 points, or 0.4% and the Nasdaq it does so by 1.7%. It should be noted that, for the first time this year, markets now only forecast three interest rate cuts in 2024. Also It’s the first time markets have aligned with the Federal Reserve’s latest guidance. The odds of a rate cut this week drop to 2% and the odds of a rate cut in May have fallen to about 7%.
Just three months ago, Markets were expecting seven rate cuts in 2024, with rate cuts starting this month. As inflation data starts to rise again, three rate cuts are starting to look optimistic.
Wall Street: what traders expect
The highlight for Wall Street this week will likely be the Federal Reserve’s interest rate meeting, which ends on Wednesday. The central bank is widely expected to keep its main interest rate stable at its highest level since 2001.
However, recent reports on inflation have been coming in consistently worse than expected. That could force the Fed to say it will deliver fewer rate cuts this year.
Such a move would be a big disappointment for Wall Street, where stock prices have already risen in part on expectations of lower rates.. Treasury yields in the bond market have also eased since last fall on such expectations, although they have narrowed those losses on concerns about persistently high inflation.
The Fed is likely to keep its main interest rate near its current level throughout this year, according to Joe Davis, chief global economist at Vanguard. The investment giant recently raised its baseline outlook for the U.S. economy in 2024 to avoid seeing a recession, but also slightly raised its forecast for underlying inflation trends.
As reported Scope, Alphabet shares rose sharply after a media report suggested Google’s Gemini AI engine could be used in Apple’s iPhone. Nvidia shares were also higher, with the company set to unveil its latest chips at “AI Woodstock.”
Source: Ambito
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