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Any pivot on rates by Fed will mean more blood in stock markets

Latest GDP, inflation data appear to be against conventional wisdom that the US central bank had engineered a ‘soft landing’

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    • If Powell pivots yet again during Wednesday’s press conference and cancels rate-cut plans, or worse, hints that the central bank may have to return to its hiking ways to nip inflation in the bud, there will be more blood shed in the stock market.
    • If Powell pivots yet again during Wednesday’s press conference and cancels rate-cut plans, or worse, hints that the central bank may have to return to its hiking ways to nip inflation in the bud, there will be more blood shed in the stock market. PHOTO: AFP

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    Rob Curran

    Published Tue, Apr 30, 2024 · 05:00 AM

    EARLIER this year, US Federal Reserve chairman Jerome Powell was keen to tell the world that the threat of inflation was gone and that the central bank was reopening the US for business by pivoting to easy-money policies.

    At the Fed’s meeting in March, he again signalled that inflation had been dealt with during his 18 month rate-hike voyage.

    He promised the markets that the Fed would cut rates more than once in 2024, barring what he saw as the extremely unlikely event of more inflation sightings on the horizon.

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