Wall Street Traders Cheer Powell’s Comments On Rates
Powell Signals No Immediate Interest Rate Hikes
By [Your Name], Highly Respected News Website
Traders on Wall Street experienced a moment of relief on Wednesday as Federal Reserve Chair Jerome Powell hinted that he did not foresee any upcoming interest-rate hikes, despite inflationary pressures facing the United States. However, the optimism was short-lived.
Short-Lived Rally with No Clear Direction
During a post-policy meeting press conference, Powell’s statement that “it is unlikely that the next rate move will be a hike” briefly launched US stocks, resulting in the most extensive post-policy meeting rally since December. Simultaneously, Treasury yields experienced a substantial drop of over 10 basis points across various maturities. Although this brought about a moment of relief, the market soon experienced a sudden reversal in equities, resulting in a downtrend for the day. While the policy-sensitive two-year yield managed to stay below the 5% threshold, the margin was slim.
According to Michael de Pass, global head of rates trading at Citadel Securities, “Powell made it clear that the hurdle for hikes is incredibly high. They ultimately view the level of rates as being restrictive, that’s undeniable. Are they restrictive enough, and how long does it take to filter through the economy, are the questions now.”
