Will the U.S. election complicate the Fed’s plans?
- U.S. stock indexes mixed: S&P 500, Nasdaq lower, DJI gains
- Comm Svcs weakest S&P 500 sector; Energy top gainer
- Euro STOXX 600 index ~flat
- Dollar, crude up; gold dips; bitcoin slides ~7%
- U.S. 10-Year Treasury yield falls to ~4.30%
WILL THE U.S. ELECTION COMPLICATE THE FED’S PLANS?
Traders are paring expectations that the Federal Reserve will cut rates three times this year, as economic growth stays strong and inflation remains sticky.
But the Fed may face a difficult task in reacting to shifts in economic data without creating any large surprises too close to November’s U.S. elections.
“They don’t want to be in a position where they are doing something offsides during an election that could be perceived to be influencing one party or the other,” Matt Eagan, head of the full direction team at Loomis, Sayles & Co., said in a recent interview.
Fed funds traders are pricing in a more than 50% likelihood that the Fed will begin cutting rates by June, and expect three 25 basis point reductions by year-end, though the probability of this many cuts has been slipping. (FEDWATCH)
Fed policymakers in December forecast three rate cuts this year, which at the time was around half the number expected by markets. They will update these estimates when they conclude their two-day meeting on Wednesday.
(Karen Brettell)
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FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:
S&P 500, NASDAQ EASE, FOCUS ON FED MEETING - CLICK HERE
BENCHMARK TREASURY YIELD: ON A WIN STREAK AHEAD OF THE FED - CLICK HERE
INVESTORS TO CEOs: WE WANT YOUR CASH! - CLICK HERE
BOJ: WHEN'S THE NEXT RATE HIKE? - CLICK HERE
AI, 'GREEN SHOOTS', M&A: KEY DRIVERS ON THE RISE - CLICK HERE
EUROPE'S CAUTIOUS TRADING AHEAD OF EZ DATA, FED - CLICK HERE
EUROPEAN FUTURES EDGE LOWER AHEAD OF ZEW, WAGE DATA - CLICK HERE
BANK OF JAPAN GOES BIG - CLICK HERE