A crucial Fed decision for the stock market


What sauce will the US central bank eat investors? The Fed’s monetary policy committee has been meeting since Tuesday, for a session that promises to be the most important for several months. If there is no doubt that the institution will standardize its policy, via an increase in Fed funds rates, several questions remain unanswered, such as the date of the first increase, its magnitude and the number of increases expected in 2022. For the time being, investors are betting mostly on a rise in the rent of the 25 basis points in March, but some, less optimistic, believe that there is a risk, albeit limited, that the Fed will carry out a surprise rate hike tomorrow. Going forward, the economists’ scenario is that of three to four additional rate hikes by December and an earlier and faster start to quantitative tightening, which could begin in June or September.

What about the end of asset purchases?

The question is whether the Fed announces the end of asset purchases a month earlier than expected, i.e. mid-February, says Tiffany Wilding, chief economist for the US market at Pimco. At the press conference, Chairman Jerome Powell may even provide additional details on how FOMC members prefer to reduce the balance sheet. He is also expected to comment on the risks posed by the Omicron variant to the economy and the recent slowdown in several key business indicators in January. ” He is likely to continue to emphasize upside risks to inflation from another supply shock, in line with his focus on reducing adjustment measures. “, adds Tiffany Wilding.

Before the verdict of the Fed, scheduled for 8 p.m. (Paris time), and the press conference of its president, 30 minutes later, the operators will focus on a whole series of statistics, including, before the market, the survey monthly outlook for French households in January, then, in the afternoon, four American indicators. These are the wholesale trade statistics, from trade deficit and building permits and sales of new homes in December, as well as weekly oil stocks.

On the securities front, investors will be watching the quarterly performance of You’re here, Intel, Boeing and AT&T. In France, we will look at the turnover or the annual results of Critical Group, Partouche Group, Infotel, memscap and Voltalia. Soitec, he will reveal his third quarter earnings.


PC



Source link -91