tl;dr
Stock index futures edged higher on Thursday, a day after major Wall Street indices notched fresh record highs as the Federal Reserve reaffirmed its forecast of three interest rate cuts this year, downplaying concerns over recent hot inflation reports. Dow futures (INDU) 0.3%, S&P 500 futures (SPX)...
Stock index futures edged higher on Thursday, a day after major Wall Street indices notched fresh record highs as the Federal Reserve reaffirmed its forecast of three interest rate cuts this year, downplaying concerns over recent hot inflation reports. Dow futures (INDU) 0.3%, S&P 500 futures (SPX) 0.4%, Nasdaq 100 futures (NDX:IND) 0.7%. Rates were lower, with the 10-year Treasury yield (US10Y) down 4 basis points at 4.23% and the 2-year yield (US2Y) down 1 basis point at 4.58%. The Federal Open Market Committee kept its policy rate unchanged at 5.25%-5.50% for the fifth straight time, with Chairman Jerome Powell noting that the risks of the Fed achieving its inflation and employment goals have moved into better balance. "Last night saw a remarkably relaxed Fed as Powell indicated that January's higher inflation could have been seasonal, and February's print had already seen improvements," said Deutsche Bank's Jim Reid, adding that Powell's dovish-leaning press conference drove equities higher and yields lower. "Our economists continue to expect the first rate cut to come in June with 100 bps of cuts in total this year, but with risks skewed to a more hawkish outcome," Reid added. Fed officials lifted their growth and inflation forecasts, and dialed back the scope of cuts in 2025 and beyond, as they continue to wait for greater confidence on inflation before easing. "The FOMC is still priced for a too-optimistic outcome regarding rate cuts in 2025," said Wells Fargo Investment Institute. "As the disinflation base effect wears off, we think it will prove difficult for inflation to move quickly toward the Fed's 2% inflation target." Traders will now shift focus to the initial jobless claims data due later in the day for more clues on the labor market. Thursday's economic calendar also includes existing home sales figures and the Fed's balance sheet.
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