Last updated on May 3, 2023
Today marks the Federal Reserve’s decision on the next rate hike at 2:00 EST. CME Group’s Fed Watch suggests an 85% chance of a 0.25 rate hike. However, as the markets anticipate this decision, we do not anticipate a significant impact on the stock market. The move is already factored into the market.
Despite the strong job market, the liquidity injection into the banking system last week has led to concerns about inflation. While we suspect that the Federal Reserve will raise rates, they will likely not be too hawkish. The markets are currently flat to down this morning, and we do not expect any significant movements until the announcement.
If the Federal Reserve’s decision is too hawkish or too dovish, the stock market may drop. Therefore, they must tread carefully, as inflation remains a problem, and they cannot stop unless the economy exhibits weakness. The concerns around the banking sector seem to have subsided, and the effects of all the rate hikes, job losses, and other factors will determine the impact on inflation.
Stay tuned for more updates, as the stock market is always an exciting ride. If you do not like the current state of the market, wait a day, as it could change quickly.
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