Well, its official, the FED continues to be the coolest kid on the block for investors after Jerome Powell all but pre-announced a rate cut at the end of July, prompting the hard core dovish players to revamp their expectations for a -0.5% move, which I believe is a far-fetched option, and could prove to be too much at this time, spooking the market, instead of reassuring it.
But more than confirming the beginning of a new era, after a cycle of monetary policy normalization, Powell also supported the continuation of the rate downward trend in the near to medium term scenario, especially because even though the non-farm payrolls number were good, they weren’t enough to point towards an over-heating of the job market, because wages were lower than anticipated. Besides all this, the FED chair also reinforced the notion of a cooling world economy, which warrants for a preventive stimulus.
Photo by Iben Konig.
Marco Silva is a Financial Market Specialist with 20 years of experience, with transactions in 12 different countries, involving numerous financial instruments, Specialist in Technical Analysis, Capital Manager, Investment Advisor, Financial Hedging Operations and Algorithm trading developer. Economic Commentator TV and RTP Information for the Financial Markets, Responsible for the Department of Economy / Markets of TVL.
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© 2019 High Leverage FX - All Rights Reserved.