Goldman Sachs FICC and Equities’ Post

Investors await the Federal Reserve's decision on interest rate cuts, with officials leaning towards maintaining rates due to solid economic growth. The focus is on whether projections will reveal one or two potential cuts this year, influenced by upcoming inflation data. Fed Chair Powell aims to avoid premature rate reductions without clear evidence of policy effectiveness. The "dot plot" projections may hint at future disagreements among policymakers. Market uncertainty persists as officials balance economic indicators for potential rate adjustments in September. #FederalReserve #InterestRates #EconomicOutlook #InflationData #DotPlotProjections #PolicyDecisions #MarketUncertainty #RateCuts #LaborMarketConditions Source: Dow Jones Co., WSJ, ChatGPT https://lnkd.in/eV3Bgh5x

What next after FOMC and Trump? In the wake of the election, we observed a robust 2.5% surge in the markets, affirming our forecasts of strong event hedging leading to a significant post-event rally. This trend extended throughout the week, driven by substantial gains in technology and banking sectors, underpinning a collective 5% rise for the S&P 500 and a 6% increase for NASDAQ. The potential policy shifts hinted at during the election—ranging from tariff adjustments to immigration reforms—suggest a landscape ripe for inflationary pressures, yet controlled enough to maintain a stable financial outlook. The Federal Reserve's steady hand despite these potential changes reflects a market primed for resilience, with inflation expectations and central bank independence remaining well-guarded under the current administration’s policies. Looking ahead, the revised upward earnings expectations signal a vigorous end-of-year rally, supported by an enormous influx of passive investing. The market’s momentum is underpinned by a significant capital flow, ensuring that any potential downturns are short-lived and that the rally is likely to sustain its strength into the new year.

The latest action from the Fed.

What was billed as another important Fed meeting last week turned out largely to be anti-climactic. The economic data that was released before the Fed meeting stole the show. Learn more in this week's #WeeklyMarketCommentary below. https://hubs.la/Q02CmC_J0

Here's my latest "Market in 5 Charts" video where I react to the Fed's recent bold move to cut rates for the first time since 2020. https://lnkd.in/eXEeiPq4

Comes as no surprise for most of the FED watchers, the Federal Open Market Committee decided to further cut rates by 25 basis points 📄 https://lnkd.in/e_ahNNj2 📄summarize of the #FOMC participants economic projections: https://lnkd.in/etHk6RjQ

Investors are eagerly awaiting the Federal Reserve's rate-cut projections, with a focus on whether one or two cuts will be anticipated. Despite divisions among policymakers, there is unity in maintaining current rates due to solid economic growth. The Fed aims to assess labor market conditions and inflation before making any moves. Inflation trends and economic data will influence future rate decisions. The upcoming "dot plot" projections could reveal potential disagreements within the Fed regarding rate cuts. Some analysts predict possible rate reductions by September based on inflation data. #FederalReserve #InterestRates #EconomicOutlook #InflationTrends #LaborMarketConditions #RateProjections #DotPlot #PolicyDecisions #FinancialMarkets #EconomicIndicators Source: WSJ, ChatGPT https://lnkd.in/e7TXPVpn

#HappyFriday And now we wait....... Do we know the outcome of the election? Yes. Do we know where the Fed is at on rates? Yes. Do we know how company earnings are faring? Yes The rest is a narrative around the data. What if...? How will...? Why did....? As Morgan Housel says in his book "Same as Ever" (fantastic read if you haven't picked it up yet), "Every forecast takes a number from today and multiplies it by a story about tomorrow." A lot of stories were in play Wednesday morning on the direction of future policy. Just like a lot of stories were in play in September about the path of interest rates after the Fed cut 0.50%. The timing of those stories rarely work out exactly as the market prices in at that exact moment. Be mindful about extrapolating too much, too fast, too soon. Reach out if you want to discuss thoughts on the market's interpretation of policy implications based on the outcome of the election: jpetrides@tocqueville.com #tocquevilleassetmanagement, #wealthmanagement #longterminvesting #riskmanagement

This Week's Significant Economic Reports and Federal Reserve Speakers 🔥 Financial reports from companies will commence this week. TUESDAY, JULY 9 🇺🇸 • Fed Chair Powell testifies before the Senate • Possible House vote to override President Biden’s veto on repealing SAB121 WEDNESDAY, JULY 10 🇺🇸 • Fed Chair Powell testifies before the House • Representative Ro Khanna will host a roundtable with billionaire Mark Cuban and Democratic officials on Crypto THURSDAY, JULY 11 🇺🇸 • CPI Inflation Data: Estimated 3.1% | Last month: 3.3% • Core CPI Inflation Data: Estimated 3.4% | Last month: 3.4% • St. Louis Fed President Alberto Musalem speaks • Senate hearing to confirm SEC Commissioner Caroline Crenshaw for the next term FRIDAY, JULY 12 🇺🇸 • PPI Inflation Data (Wholesale Inflation)

Investors widely expect the Fed to enact a third-in-a-row rate cut this week. Officials are ready to slow—or even stop—lowering rates after that. https://lnkd.in/gqyvHKQa via Custom Content from WSJ