Fed Plans Three Cuts in 2024, With A Shallower Path Ahead – US Market Wrap

Wall Street traders pushed stocks to new all-time highs after the Federal Reserve signalled its intention to cut interest rates for the first time since the pandemic began.

In a historic move, the S&P 500 surpassed 5,200 on speculation that the end of the most aggressive Fed hiking cycle in a generation would continue to fuel Corporate America’s profits. Equities rose almost uniformly, with areas that had lagged this year, such as small caps, rallying. Short-term Treasuries outperformed, and traders now expect a first rate cut in June.

Fed officials maintained their forecast for three rate cuts this year and slowed the pace of bond purchases, implying they are not concerned about recent inflationary pressures. While Jerome Powell reiterated that officials want to see more evidence that prices are falling, he also stated that it will be appropriate to begin easing “at some point this year.”

The tech-heavy Nasdaq 100 increased by 1.2%. Two-year yields fell seven basis points to 4.6%. The dollar dropped.