The FED rhetoric changed a bit after the latest FOMC meeting, aligning it with the market anticipation. Namely, the FOMC members continue to perceive Fed interest rates at 4.6% at the end of the next year, which would mean several rate cuts during the course of the year. The market perceives the first one to occur in March 2024. The market was highly supported with Powell's speech after the FOMC meeting, where S&P 500 reached new highs for this year at level of 4.735. For one more time, the index was pushed to the higher grounds, moving within highly overbought momentum for the last three weeks. The sustainability of such moves could be questioned, considering Powell`s note that the economy did not performed well during the Q4, and that expected GDP growth for this year stands around 2.5%. On the opposite side a clear break of 4.700 level, might be a trigger for reaching the ATH at 4.800.
Considering the strong push toward the upside, the week ahead might bring some relaxation on the equity market. For the S&P 500 this might mean a modest retreat toward the 4.650 level. Also, it should be considered that Fed`s favorite gauge, the PCE index will be released during the week ahead. Any surprises on inflation figures might trigger market moves to the up or down side.
Considering the strong push toward the upside, the week ahead might bring some relaxation on the equity market. For the S&P 500 this might mean a modest retreat toward the 4.650 level. Also, it should be considered that Fed`s favorite gauge, the PCE index will be released during the week ahead. Any surprises on inflation figures might trigger market moves to the up or down side.
