As expected, the Fed left the rate unchanged. Market participants' attention was focused on Powell's press conference, as he said:
→ Risks have now become almost balanced;
→ Inflation expectations are at a good level.
The media publishes the opinions of experts who generally agree that although Jerome Powell has not ruled out the possibility of another rate increase, he does not seem to be very supportive of this idea. So the Fed is not as aggressive as it could be.
As a result, the probability of a rate hike in December has dropped to 20%, and the probability that the rate hike cycle has ended is at 70%.
The S&P 500 stock index reacted positively – the price rose at the end of trading. However, how long will the bullish momentum based on Powell's words last?
The graph shows that:
→ the price of the S&P 500 is still in a downward trend, judging by the channel (shown in red), and the upper limit of the channel, where we should expect the bears to intensify their efforts, is already close;
→ the price has risen to the important technical level 4,266, which has repeatedly affected it — perhaps now it will provide resistance;
→ tapering bullish candles late yesterday indicate that buyer activity may be drying up.
Today, as we note, a report on the activities of Apple, the largest company by capitalization, will be released. If it turns out to be worse than expected (for example, due to the dynamics of sales of the 15th iPhone), then the positivity from Powell’s words can be significantly (if not completely) won back by the bears.
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