Odaily News Investors are resigned to the fact that the Federal Reserve may not cut interest rates this time around as the two-day meeting of the U.S. central bank begins. But they are looking for any signals from Fed Chairman Jerome Powell on the direction of inflation at a time when stocks are at a vulnerable point.
“Powell’s tone on inflation will be critical to Wall Street as traders need to hear that price pressures are continuing to ease and there are clearly potential black swans out there,” said John Belton, portfolio manager at Gabelli Funds.
Swap contracts show that traders expect the Fed to pause its rate cuts, but they are not sure how long. That's why it's worth watching the tone of Powell's speech at the press conference after the rate decision on Wednesday afternoon local time. It would be out of character for him to show anything other than caution and reluctance to commit, but Wall Street professionals will listen to his words or tone for anything that indicates his thoughts. (Jinshi)