Reserve Dollar

Dollar

Jerome Powell

Chair

Reserve

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<p class="has-drop-cap">Federal Reserve Chair Jerome Powell <a href="https://www.cnbc.com/2024/08/23/watch-fed-chair-jerome-powell-speak-live-from-the-jackson-hole-conference.html" target="_blank" aria-label="signaled (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">signaled</a> a major shift in U.S. monetary policy on Friday, indicating that the central bank is preparing to cut interest rates. Speaking at the annual Jackson Hole Economic Symposium, a premier gathering of global central bankers, Powell’s remarks were closely watched by investors for clues about the Fed’s future actions.</p>
<h3 id="powell-signals-rate-cut-intentions">Powell Signals Rate Cut Intentions</h3>
<p>“The time has come for policy to adjust,” Powell stated in his address, adding that “the direction of travel is clear.” <br><br>These comments mark a significant departure from the Fed’s recent stance of maintaining higher interest rates to combat inflation. Powell expressed growing confidence that the battle against <a href="https://tokenist.com/investing/how-to-hedge-against-inflation/" rel="noopener noreferrer nofollow" class="deco-link">inflation</a> is on track, suggesting that the Fed is now ready to ease its monetary policy.</p>
<p>The speech, delivered on August 23, 2024, comes at a time when markets were already anticipating potential rate cuts. Prior to Powell’s remarks, there was a 78% probability priced in for a 25 basis point rate cut in September. This shift in policy is likely to be viewed positively by financial markets and could lead to the first Fed rate cut since 2020.</p>
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<h3 id="stock-market-surges-as-rate-cuts-in-sight">Stock Market Surges as Rate Cuts in Sight</h3>
<p>As of 10:06 AM EDT on the day of Powell’s speech, financial markets showed a positive response to the Fed Chair’s comments. <br><br>The Dow Jones Industrial Average rose 292.1 points (0.72%) to 41,004.88, while the NASDAQ climbed 217.29 points (1.23%) to 17,836.64. The S&amp;P 500 also saw gains, up 49.96 points (0.9%) to 5,620.6.</p>
<p>In the commodities market, gold prices increased by $17.4 (0.69%) to $2,534.1, and oil prices rose $1.24 (1.7%) to $74.25 per barrel. Treasury yields fell, with the 10-year yield dropping 0.052 to 3.81% and the 2-year yield decreasing 0.059 to 3.951%. <br><br>The U.S. Dollar Index weakened, falling 0.41 (-0.41%) to 101.1, while the <a href="https://tokenist.com/investing/implied-volatility/" rel="noopener noreferrer nofollow" class="deco-link">VIX volatility index</a> decreased by 1.12 (-6.38%) to 16.43, indicating reduced market uncertainty.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em><br></p>
<h3 id="br"><br></h3>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/powell-signals-end-of-rate-hikes-wall-street-surges/">Powell Signals End of Rate Hikes, Wall Street Surges</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Powell Signals End of Rate Hikes, Wall Street Surges

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