Market Expected to Be Volatile after Today’s FOMC Meeting Minutes
Stock market analysts are anticipating a very frenzied trading session today following the release of the FOMC meeting minutes.
The US Federal Reserve will indicate what policies the government will set for the upcoming months. They may speak on interest rate cuts and when those might be coming. These are cuts that have been delayed month after month in 2024, with the latest estimates placing those cuts in September or perhaps even next year.
The Federal Reserve has said that its stance on making interest rate cuts is that it will only consider doing that once inflation decreases. They are looking for a target of about 2% inflation before making the cuts.
The current federal funds target rate is 5.25-5.5%, and a cut could bring that down by three quarters of a percent, according to most analysts.
The FOMC minutes will tell investors whether the Fed has been trending hawkish or dovish recently, which will help to determine where the market might be headed. Even though inflation is slowly decreasing, the Fed has held back on making some policy decisions until the inflation rate decreases further, and these minutes will indicate what the next move is for the Fed.
US inflation is at 3.36% right now, which is down from 3.48% the previous month. It is also down from last year’s mark, which would have been 4.93% at this time in 2023.
The Stock Market Prepares to React
Many investors will be making trades leading up to the minutes based on analyst predictions. All three major market indices closed Tuesday evening at an elevated mark from the previous day. The market is optimistic about Fed policy at the moment, but we may see last minute scrambles for trades leading up to the FOMC minutes.
Many analysts still expect to see the first rate cuts in September, and if those are announced or do happen, then the market should react dramatically. Any news coming out of the FOMC meeting today will shift the market, and we anticipate a change in where the market ends up by the close of trading today.
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