📉 Possible Interest Rate Cut:🔥➡️
Jerome Powell's message suggests that the Fed could ease its monetary policy. "Powell mentioned that the 'changing balance of risks' and the weakening labor market could justify an adjustment in rates.
These statements have generated strong optimism among investors, as a cut in the cost of money lowers credits for businesses and households, which in turn stimulates the economy.
Market Reaction:
1. The major US stock indices, such as the Dow Jones and the S&P 500, recorded strong gains, reaching new highs. Latin American and European markets also reacted positively.
2. Dollar and Bond Values: The US dollar experienced a decline against other currencies, while the yield on US Treasury bonds plummeted, reflecting the expectation of a more lenient monetary policy.
3. Divided Opinions: Despite Powell's stance, not all members of the Fed are in favor of a cut. Some, like Governor Musalem, have pointed out that more data confirming the economic slowdown and controlling inflation are needed before making a decision.
🏛️ Political Pressure💥🧨💣
US President Donald Trump has intensified his pressure on the Fed to lower interest rates, arguing that a more flexible monetary policy is necessary to boost economic growth and counteract the effects of tariffs. In this context, he has demanded the resignation of one of the Fed's governors, Lisa Cook. Political pressure generates debate about the independence of the Fed, a key feature for the central bank to make decisions based on its dual mandate of controlling inflation and promoting maximum employment, without interference.
Staying informed is one of the strategies to gauge the positive or negative reactions that will impact global financial markets. Despite using your investment strategies around price trends and the behavior of indicators, last-minute news will dismantle those strategies...
All information is for educational purposes and does not constitute investment advice, but obviously, it is a significant step that you remain always informed...
