Last week, U.S. equities pushed higher on trade optimism and earnings despite many risks and uncertainties. This Wednesday, the Federal Reserve (Fed) will announce its interest rate decision. It is expected that the central bank will reduce interest rates by 25 basis points.
Despite differences in monetary policy, I anticipate Fed Chairman Jerome Powell will be able to get a majority consensus for a rate cut. I also expect the press conference that follows to be closely scrutinized for any indication of whether the Fed will pause after this rate cut. Any dovish language or sentiment from the Fed will likely push Treasury interest rates higher and continue the advance in equity markets.
In addition to the Fed decision, earnings season is in full swing. I expect earnings reports to support stock valuations at these levels in the market.
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