It Took Just Two Sentences From The Fed Today To Make The Stock Market Go Wild
The stock market violently reversed its slide today, with the Dow gaining over 270 points, and the NASDAQ rallying over 2%.
The event that made stocks take off like a rocket ship was the Fed minutes that came out at 2 PM ET.
The Minutes - which reflect the nature of the conversation at the Fed's last meeting - contained two critical lines.
Here they are:
-- Some participants expressed concern that the persistent shortfall of economic growth and inflation in the euro area could lead to a further appreciation of the dollar and have adverse effects on the U.S. external sector.
-- At the same time, a couple of participants pointed out that the appreciation of the dollar might also tend to slow the gradual increase in inflation toward the FOMC's 2 percent goal.
In recent days we've been writing a lot about how the market is perceiving monetary policy to be tightening significantly. Short-term interest rates have been on the rise, inflation expectations are falling, and the dollar has been surging.
With those two lines, the Fed has explicitly acknowledged what the market is concerned about, that policy is tightening and that inflation growth may be depressed.
And with that acknowledgment, stocks surged.
- Billionaire investor Mark Mobius says he's been able to get his money out of China, but investing in the country is still a 'dilemma' amid national security laws
- The Carnival cruise passenger who went overboard and remains missing was on his first cruise and it became his 'happy place,' his fiancée said
- My fiancé and I picked out my engagement ring together before he proposed, and I don't regret missing out on the surprise
- Attractiveness of gold depends on US Fed's moves, say analysts
- Coal India’s ₹4,000 crore offer for sale subscribed 4x times
- Nvidia's Jensen Huang started with a $10 million failure before shifting gears to become a $1 trillion company
- Meet the top Nifty50 performers in FY23
- Apple to declare the 12-inch MacBook as obsolete on June 30