Daily Alert – Wednesday 1st May 2024: How hawkish will Powell be?

Mark NugentDaily Alert, May 2024

Daily Alert – Wednesday 1st May 2024: How hawkish will Powell be?

Good afternoon.

Eurozone core inflation beat expectations to the upside. This is bad news in terms of the fight against inflation. GDP also beat expectation to the upside on a year-by-year basis. As the European Central Bank has said many times, the road to 2% inflation will have some twists and turns.

Tonight, we have the Fed’s rate-setting meeting. No change is expected. What is expected is a hawkish Fed Chair Powell who will again hammer the message that interest rates will be “higher for longer”. The S&P500 has already had a small tumble this week and the markets seem quite ready for a further fall if the Fed is as hawkish as it is expected to be.

Meanwhile, observers of the Bank of Japan’s shenanigans believe USD35.1 billion was spent on Monday supporting the Yen. The bank remains inscrutable.

I will be back tomorrow with a brief video of Trade 13, S&P500 long, +1.26%.

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