While the markets are trying to recover from a recent sales action which left the S&P 500 (^ GSPC) and the NASDAQ (^ ixx) in correction territory, a major catalyst this week could make or break a return: the decision of the policy of the Federal Reserve on Wednesday.
The central bank should hold stable interest rates in the face of pricing uncertainties and recent growth problems.
But the simultaneous liberation of the Fed quarterly forecasts, otherwise known as the economic projections (SEP), as well as the post-decision press conference of the president of the Fed, Jerome Powell, will be at the center of the unpacking of investors.
“Powell Post-Fomc will have to reassure market growth remains healthy and the trajectory of inflation always stresses 2% while confidence is in the midst of stagflation concerns, or fears of pure recession
A dark economic scenario in which growth stals, inflation persists and unemployment increases, stagflation has become the latest fashionable word in the financial markets while investors are trying to understand the changing commercial account of the administration and other unknown policy, including recent efforts to reduce government jobs of the Elon Musk government (DOGE).
In a global survey of 171 participants, the latest Global Fund Manager survey of Bank of America, published on Tuesday, showed that 71% of investors questioned are expecting stagflation, the highest level since November 2023.
“Regarding growth (the” stag “part of the stagflation), Powell will have to reconfirmed his recently articulated certainty that” hard “data remains favorable, even if the” soft “data is weak”, wrote Emanuel.
“In the” Flation “part of the stagflation, Powell must indicate that inflation remains on its path at 2%, even in the midst of potential short -term obstacles.”
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