NatalieLopez
20 Mar 24
Stock index futures were little changed on Wednesday as investors looked ahead to the Federal Open Market Committee (FOMC) decision that afternoon. S&P futures, Nasdaq 100 futures, and Dow futures were up slightly. Rates were also little changed, with the 10-year Treasury yield falling 1 basis point...
Stock index futures were little changed on Wednesday as investors looked ahead to the Federal Open Market Committee (FOMC) decision that afternoon. S&P futures, Nasdaq 100 futures, and Dow futures were up slightly. Rates were also little changed, with the 10-year Treasury yield falling 1 basis point to 4.28% and the 2-year yield falling 1 basis point to 4.68%. The markets are pricing in a near-certainty that the Fed will keep rates on hold, shifting attention to the Summary of Economic Projections - the dot plot - and Fed chief Jay Powell's press conference.
Any shift in the dots that result in either less implied cuts in 2024 or a higher terminal rate would be quite damaging for the bond market, according to ING. UBS' Paul Donovan emphasized the importance of the press conference, stating that it will set expectations for rate cuts, leaving the markets at the mercy of Fed Chair Powell’s whimsical communication style. Financial 'markets' are not a single entity pricing in rate cuts - many bond investors will never have speculated in fed funds futures, for instance.
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