Encouraged by the Fed's hint that the interest rate hike cycle is over and that it will cut interest rates three times tomorrow (2024), the four major U.S. indexes staged a celebration**, and the Dow jumped more than 500 points in one breath, reaching a new all-time high for the first time since January 2022.
The Dow Jones ended on December 13 **14%(512.3 points), closed at 37,09024 points, a record high;NASDAQ**138%(200.57 points), closed at 14,73396 points, a new high since January 14, 2022;S&P 500**137%(63.39 points), closed at 4,70709 points, a new high since January 12, 2022;Philadelphia Semiconductor Index**155%(60.77 points), closed at 3,99095 points, the highest since January 4, 2022.
The Federal Open Market Committee (FOMC) maintained the federal ** interest rate at 5 on the 13th25-5.50% unchanged, and 17 of the 19 Fed** Feds** will have their policy rates down by the end of 2024.
The Federal Open Market Committee's "dot plot of interest rate expectations" (based on the dot plot drawn by each FOMC member on the federal interest rate) on the 13th hinted that they generally believe that interest rates will be cut by 75 basis points by the end of 2024, higher than the Fed's previous estimates.
The Federal Open Market Committee admitted in its post-meeting statement that inflation has gradually eased over the past year, and the Federal Reserve has officially lowered its inflation estimate for 2024 from the original 26% to 24%。
Federal Reserve Chairman Jerome Powell revealed at a press conference after the meeting on the 13th that the central bank is unlikely to continue to raise interest rates, and will be very careful not to make the mistake of keeping interest rates too high for too long.
As for the last mile of the fight against inflation, Powell said that we thought it would be more difficult from now on, but it does not seem to be the case at the moment.
The Chicago Mercantile Exchange's (CME) Federal Reserve Watch tool showed that federal investors cut interest rates by 25 basis points to 5 on March 20, 202400-5.25% chance from 39 the day before7% jumped to 681%, and the probability of a rate cut of at least 25 basis points on 1 May rose to about 90% from 80% before the FOMC statement.
U.S. Treasury Secretary Yellen pointed out in an interview with Wall Street's journalist Nick Timiraroos, known as the "Fed mouthpiece", on the 12th that inflation has indeed cooled significantly and is expected to slow down to the Fed's preset target. Personally, she said, I don't think the last mile of fighting inflation will be bumpy.
Analyst Adam Button said on the 12th that he guessed that the FOMC should eventually agree with Yellen's view (or have long thought so), and if Powell also revealed in his speech on the 13th that the last mile of the fight against inflation is not particularly difficult, it may trigger financial markets to celebrate** and the dollar will be sold off.
It is worth noting that the monthly growth rate of the U.S. producer price index (PPI) in November, which was announced earlier on the 13th, unexpectedly remained unchanged, mainly due to the decline in energy commodities**.
The United States announced on the 12th that the consumer price index (CPI) in November increased by 3 per year1%, in line with the estimate of economists surveyed by Dow Jones, and the monthly growth rate was 01%, slightly higher than economists' estimates of flat. The annual and monthly growth rates of the core CPI excluding food and energy** are as follows. 3%, in line with market expectations.
The S&P 500 rose across the board, with interest-rate-sensitive real estate and utilities stocks rising more than 3% to become the leader, and the Russell 2000, a small-cap index, also rose 35%。
*In terms of changes, Pfizer's stock price bucked the trend and plunged 672%, closed 2666 USD.
Tesla (Tesla, Inc.)After the U.S. road safety authority announced that the company would recall more than 2 million electric vehicles and fix some problems with driver assistance systems, the stock price bucked the trend in early trading and still rose slightly by 096%, closed 239$29.