Stocks Soar After Powell’s Comments
After comments on Wednesday by Federal Reserve Chairman Jerome Powell that interest rates will likely be cut in July, US stocks leapt to record highs, according to The Wall Street Journal.
Powell said, “it appears that uncertainties around trade tensions and concerns about the strength of the global economy continues to weigh on the U.S. economic outlook.” While some think that the Federal Reserve should wait to cut interest rates for when economic outlook is very bleak, investors are eager for the Fed to cut interest rates.
“Now everybody is really confident that the Fed is going to cut rates at the July meeting,” said Shana Sissel, senior portfolio manager for CLS Investments. The anticipation has caused the S&P 500 and the Nasdaq Composite to hit all-time highs. The Dow Jones Industrial Average climbed 0.6%, on track to snap a three-day losing streak.
Federal-funds futures that investors use to bet on Fed policy showed a 21% chance that the Fed will cut rates by half a percentage point at the July 31 meeting.
Investors have been expecting the Fed to cut interest rates for the past couple months because of the US-China trade wars and slow global economic growth.