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Why the Federal Reserve may have killed the stock market rally



Mr. The market always wants everything.

<p class = "canvas-atom canvastxt Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "So it is no surprise that Wednesday ended with a downward bias after Federal Reserve chairman Jerome Powell's well-polished presentation & nbsp; to main applicant journalists Wednesday afternoon The Dow Jones Industrial Average fell 1

41 points, near the low Session broke a series of very bullish sessions The major banking stocks like JPMorgan Chase and Bank of America – who had gotten together nicely in Fed Day – were wise, the 10-year state tax return pigeon to its lowest level since January 2018 that the market was baked for a long period of meh american growth. "data-reactid =" 16 "> So there is no surprise stock ended Wednesday with a downward bias after the Federal Reserve chairman Jerome Powell's well-polished presentation to headline search call nalists Wednesday afternoon. The Dow Jones Industrial Average fell 141 points, close to the downturn in the session, and broke a string of very very bullish sessions. Big bank stocks like JPMorgan Chase and Bank of America – which had been neatly collected at Fed Day – were wise. The 10-year state tax gives pigeon to its lowest level since January 2018 when the market was baked for a long period of meh US growth.

Finding what is upset is the strong mood of the market not too difficult. Actually, that's right for you. The question now is whether the Fed in one case has disturbed the light money environment that has seized Wall Street for most of 2019.

The answer: perhaps. [192903] <h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " A very stupid Federal Reserve "data-response time =" 19 "> A very tough Federal Reserve

Federal Reserve Chair Jerome Powell speaks at a press conference in Washington, Wednesday, March 20, 2019. (AP Photo / Susan Walsh)

<p class = "kanvas-atom kanvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The setting in Fed Day was this: & nbsp; A Patient Fed on Intense Stature Hiking Front & nbsp; would lead to a growth acceleration in the second half of this year. omin not catch fire with rising increases but by the table in 2019, the labor market is still solid and companies take advantage of the trump tax cuts. "Data-React =" 31 "> The Fed Day setting was this: A patient Fed on the interest-rate front would lead to a growth acceleration in the second half of the year. How could the US economy not catch fire with interest rate increases but on the table in 2019, the Market worked is still firm and companies that benefit from the Trump tax cuts.

Unfortunately for the bulls, Powell stuck a dagger in his heart by perhaps being too good-looking, not only did Fed give his patience and a cautious way to settle his huge balance sheet, but It outlined its US growth forecasts for 2019 and 2020. It also highlighted its unemployment forecasts for 2019, 2020 and 2021. The stones on further interest rate hikes this year were removed.

That everyone is at the heart of the story that has sent shares that are booming so far this year, in fact, it shows a Fed's concern about the growth outlook for some reasons – he Partial voltages, top margins, higher oil prices, the presidential election's grain dynamics, etc. Keep in mind that clear concerns are despite low interest rates and

Terrible signal to the market, Powell.

Interest rate cuts since 2019

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Some reflect on Wall Street growth prospects so that Powell Fed must lower interest rates later this year . Wait, what? "Data-reactid =" 36 "> Now on Wall Street, growth prospects speculate that Powell Fed must lower interest rates later this year. Wait what?

"The Fed's revised economic forecasts, which now do not increase rental rates this year, may have been a little more stupid than the most anticipated, but we believe their underlying economic forecasts are still too optimistic. We expect that economic growth will be well below the trend in 2019, which is why we believe that Fed's next step will be to lower interest rates, ”says Capital Pact's CFO, American economist Michael Pearce.

"The decision to leave the target of the funds unchanged at 2.25-2.50% was expected unanimously, but the sharp downturn in government debt following the decision suggests investors were surprised at the clear tone of accompanying statement and economic forecasts. says Pearce.

"The Fed does not want to enter the deal to predict the outcome of political decisions, at least publicly, but the removal of both 2019 dots suggests to us that they are much more concerned about external risks than we think are justified as one. bass case "Pantheon Macroeconomics chief economist Ian Shepherdson explains.

Does Powell have more mocking investors? Some say yes, others are not sold. At least initially, Mr. Market is sold – and he is more worried today in rally than on Monday.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Brian Sozzi is an editor in general at Ya hi Finance. Follow him on Twitter @BrianSozzi "data-reactid =" 41 "> Brian Sozzi is a great editor at Yahoo Finance. Follow him on Twitter @BrianSozzi

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