Stock markets in Asia and Europe largely moved higher this morning following nine straight upward trading sessions of the S&P 500 in the U.S. S&P futures were down 0.78% this morning, suggesting that some investors might want to sell their recent gains today.
More broadly, investors are holding their breath for Wednesday’s interest rate decision from the U.S. Federal Reserve. President Trump has been loudly arguing that Fed Chair Jerome Powell should cut the rate, but the smoke signals from the Eccles Building suggest that the central bank will keep rates on hold. As always, it will be his commentary and guidance that will move markets on the day.
Here’s a snapshot of today’s action:
Absent a clear direction either way, the Fed is likely to hold. The most recent public statement from a member of the Federal Open Markets Committee came from Beth M. Hammack, president of the Cleveland Fed, who underlined that sentiment. “I think we need to be patient. We want to make sure we’re moving in the right direction, rather than moving quickly in the wrong direction,” she said, according to a Goldman Sachs research note seen by Fortune.
Goldman’s chief economist, Jan Hatzius, thinks the Fed might be somewhat biased toward cuts rather than raises. “While the FOMC appears to be setting a higher bar for rate cuts than during the 2019 trade war, we do not think that high inflation would deter it from cutting if the unemployment rate begins to trend higher as the tariff shock hits the economy,” he told investors in a recent note.
“The Fed’s main problem is inflation uncertainty. There is little confidence in what future trade taxes will be. Overnight, U.S. President Trump declared a 100% tax on imported movies—Mr Bean is seemingly a national security threat,” UBS analyst Paul Donovan said this morning.
