Source: Reuters
Authors: Davide Barbusha and David Randall
Article: Original article
Publication date: Thursday, December 1, 2022
Reaction to Powell's speech on Wednesday was positive. The S&P 500 soared more than 3% after Powell said the Fed could scale back the pace of its rate increases as early as December. He warned, however, that there was no clarity on how high rates would ultimately end up.
“We believe this is a short-lived rally,” said Jake Jolly, senior investment strategist at BNY Mellon. “Most likely there will be a recession next year and that will put pressure on risk assets like equities.”
“It seems like Powell came in today and expressed confidence that the brakes are working,” said Jake Schumeier, portfolio manager at Harbor Capital Advisors. However, over the longer term, "the market seems positioned for a slowdown, so the upside will be limited once we get past seasonal trends later in the year," he said.
Forecast:
Decline in S&P after Christmas rally
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