The interest rates were mostly a defined matter. Instead, investors turned to Fed’s economic forecasts for the year.
The so-called point diagram, which is published once in the quarter, summarizes the forecasts of the Fed officials for interest rates, inflation and growth. The FED held its median projection of two quarter -point cuts for 2025.
Investors were certain that the Fed would keep interest rates constant, which means that it would have little effect on equity prices. However, the point diagram moved the markets.
All three main indices went back strongly at 2 p.m. When the Fed published its outlook after they rose in the morning hours of the session. The rest of the afternoon was chopped off among all three indices. Start -up diagrams were all sharp peaks and valleys.
Ultimately, they were about to go where they started the day.
The S&P 500 closed by 0.03% and the Dow Jones fell by 0.1%. The Nasdaq Was the only one of the three that was in a positive area for this day and ended with 0.13%. The S&P 500 and the NASDAQ remain positive from year to year and 1.9% or 1.4%.
This latest point lawsuit had preludes to stagflation – the most catastrophic economic scenarios. The investors had hoped that the worst market for the annual market was behind them. After a brutal April, in which stocks, bonds and the US dollar declined according to President Donald Trump’s collective bargaining policy, the markets have largely recovered.
However, the latest FED projections have caused fears that may not be the case. Forecasts for inflation and unemployment grew, while those for growth decreased. Everything that even carries the proposal of a stagflation can bring the markets on a high alert. In the score, the core inflation expectations rose to a peak value of 3.1% compared to 2.8% in March, and the forecast unemployment rate rose from 4.4% to 4.5%.
However, every forecast and every plan has changed, said Jerome Powell, chairman of the Federal Reserve, during a press conference on Wednesday.
“These individual forecasts are always subject to uncertainty, and as I have determined, the uncertainty is unusually increased,” said Powell. “And of course these projections are not a committee plan or a decision.”
When the markets deal with domestic uncertainty; They were welcomed with another war in the Middle East. The growing conflict between Israel and Iran has now added a significant new fold, which investors have to take into account in their decisions. Whenever the Middle East is questioned, the oil markets are often the focus. Both countries bombed each other the oil refineries in the early days of the war.
On Wednesday, the oil futures fell by 3%in 25 minutes in the morning before recovering the rest of the day. They then recovered by about 2.3%back to a positive area before falling in the late afternoon. At the time of publication, they declined by 0.1%.
How the oil prices go, including the greenback. At least most of the time. The US dollar index (DXY) rose by 0.16%a day. This trajectory continued two days of positive movements for the index, which had fallen to under 98 on Monday.
