The market hates uncertainty, and today’s FED meeting is no exception. With almost no chance of a rate hike, the market will be looking for clues about the Fed’s direction. A calm statement with a wait-and-see approach is what investors are hoping for. Too hawkish or too pacified could be negative for the market.
If the Fed says something like “we are going to keep her eye on the target that we see inflation moderating,” the market could rally in the short term. However, if they don’t, the market could sell off again.
It’s important to remember that inflation is still too high for the Fed’s comfort, so they are unlikely to be too dovish. However, they may be willing to slow down the pace of rate hikes if they see signs that inflation is moderating.
Here are some of the key factors that investors will be watching today:
- The Fed’s economic projections
- The Fed’s assessment of inflation
- The Fed’s guidance on future rate hikes
Overall, the outlook for the market is positive. Earnings have been beating estimates, companies are in good financial shape, and investor confidence remains strong but slowing. However, there are still some short-term challenges to be aware of, such as the lagging effects of higher interest rates, labor strikes, and higher gas prices.
Investors should focus on value and stay invested. There are plenty of great value companies with great dividends, excellent growth companies with innovative products, and treasury yields are at the highest they have been in decades.
IPOs are also back, which is a sign that investor confidence is growing. This looks to be a great time to be a Fiscal Investor, and it is always great when you can get in at the ground floor. As any Fiscal Investor, one must be discplined, patient and educated!