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What Does the Stock Market Think About Interest Rates?

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Wall Street ended the month yesterday in style with all three major indexes closing in the green for their second consecutive month. Specifically, the Dow Jones, S&P 500 and Nasdaq composite closed yesterday’s session with daily gains of 2.18%, 3.09% and 4.41% respectively.

Wednesday’s surge on Wall Street was triggered by comments made by Fed Chair Jerome Powell during a speech at the Brookings Institute think tank in Washington, regarding the outlook for the US economy.

Investors were listening keenly for any hint about the Federal Reserve’s next moves ahead of their policy meeting in a couple of weeks. They weren’t disappointed.

Powell announced that, “it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” before adding, “The time for moderating the pace of rate increases may come as soon as the December meeting.”

These comments were mostly in line to previous remarks from the Fed in the past weeks. Investors cheered the dovish tone. Wall Street reacted almost instantly to Powell’s comments, with the three main US indices starting to soar soon after Powell spoke.

Investors are so concerned about this…



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