Wall Street Breakfast Fed cuts rates, but Powell plays the Grinch
Dec 18, 2024
Jay Powell's recent quarter-point rate cut sends shockwaves through the market, with stocks plunging and yields climbing. The Fed hints at fewer future cuts and escalating inflation in 2025, causing a financial stir. In the corporate arena, Merck joins the obesity drug race, while General Mills and NVIDIA reveal their latest earnings. With bold predictions for stock movements ahead, the discussion highlights the tension between monetary policy and market reactions, painting a vivid picture of today's economic landscape.
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Hawkish Fed Cut Impacts Market
- The Federal Reserve implemented a hawkish rate cut, surprising the market.
- This led to stock tumbles, rate jumps, and the worst Nasdaq performance since July.
Fed Projections Shift
- The Fed's dot plot now projects two quarter-point cuts in 2025, down from four previously.
- Three members believed maintaining steady rates was appropriate.
Increased Inflation Expectations
- The Fed's inflation expectations for next year have increased.
- Both headline and core PCE are now projected at 2.5%, up from 2.1% and 2.2%, respectively.