Wall Street’s major indexes had lost ground immediately after the Fed announced its rate hike decision. Its statement also said “ongoing increases” to rates would be appropriate.
But the indexes bounced off their lows and kept gaining ground soon after Powell started speaking to reporters with the S&P ending up 1% and the Nasdaq adding 2%.
Investors were encouraged by Powell’s answer to a question about easing financial conditions such as rising equities and falling bond yields in recent months, according to Angelo Kourkafas, investment strategist at Edward Jones, St Louis.
“He had an opportunity to relay a hawkish message and didn’t take it. He could’ve said that markets are getting overly excited and he didn’t take the opportunity. Instead he said a lot of tightening has already happened,” said Kourkafas.
Since Powell said he could acknowledge for the first time that disinflation had started to happen, investors saw his suggestion…
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