From NASDAQ: 2024-09-17 00:13:06

Chair Powell and the Federal Reserve’s upcoming move is not expected to be pivotal. The Fed could choose to reduce rates by 25 bps with a weak statement, reduce rates by 25 bps with a strong statement, or reduce rates by 50 bps. Option 1 is less likely, while Options 2 and 3 are more favorable.

Markets may not respond well to a 25 bps rate cut, with potential moderate drops in major indices pending weak jobs reports or earnings data. Despite short-term volatility, investors may find buying opportunities within downswings. The Fed is data-driven and aims to maintain price stability while addressing unemployment risks.

Down the line, the Fed may implement larger rate cuts if economic data warrants it to ensure a soft landing. Investors are encouraged to consider opportunities in technology, healthcare, and infrastructure, as well as high-quality stock portfolios that have consistently outperformed the S&P 500.

While near-term volatility is expected due to geopolitical conflicts and loan default risks, the Fed’s ability to adjust rates provides a buffer. Despite potential challenges in commercial real estate and consumer defaults, the Fed is poised to support a soft-landing scenario and provide liquidity if needed.

In the midst of market uncertainties, Trefis strategies offer investors a chance to capitalize on opportunities while managing risks effectively. The upcoming Fed decision may lead to short-term volatility, but a more favorable market outlook is anticipated in the medium term for investors to benefit from.



Read more at NASDAQ: How To Profit From The Fed’s Next Decision?