The Fed Is in no Rush to Cut Rates, Even if There Is a Weak Jobs Report
Published On Jan 10, 2025, 6:02 AM
The Federal Reserve is anticipated to pause its rate-cutting campaign this month, despite previously lowering interest rates as inflation was cooling. Recent indicators suggest that while the job market is stabilizing, inflation progress has stalled. Fed officials, including Michelle Bowman, convey a cautious approach, indicating any rate cuts will depend on significant changes in economic conditions before the next meeting.
Stock Forecasts
SPY
Positive
Investors should consider that the Fed's decision to pause rate cuts may lead to more stability in financial markets. A stable job market without new rate cuts is generally positive for economic growth and consumer spending, which could bolster stock performances in certain sectors.
XLF
Negative
Since the Fed indicates a cautious stance on rate cuts, financials may see less downward pressure. However, sectors sensitive to interest rates may face challenges if inflation continues to stall, indicating a negative outlook for such sectors if rates remain higher for longer.
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