(News Bulletin 247) – The New York Stock Exchange is expected to open higher on Thursday morning the day after announcements by the Federal Reserve, which have fueled expectations of an upcoming stop to its rate tightening cycle.

After their decline the day before, the major Wall Street indices should gain between 0.2% and 0.9% at the opening, according to the evolution of index futures.

On Wednesday, US stocks had lost around 1.6% following monetary policy decisions by the Fed, which raised rates by 25 basis points while signaling upcoming rate hikes.

The lack of clarity expressed by the US central bank on the trajectory of its hikes initially worried investors, before they adopted a more optimistic posture.

Market participants say there may only be one or two additional rate hikes of 25 points, but no third, raising hopes of a ‘pivot’ sometime in the second half.

“Strains in the banking sector will contribute to slowing economic activity, demand and ultimately inflation, so less action will be needed from the Fed to tighten financial conditions sufficiently,” he said. do we at Pimco.

‘Therefore, the Fed has probably approached the end of the bullish cycle’, underlines the asset manager.

A sign of these end-of-cycle expectations, the yield on 10-year US government bonds fell back to around 3.51% after having exceeded the 4% threshold at the start of the month.

The market is pricing in just a 45% chance of a quarter-point rate hike in May, according to CME’s FedWatch Barometer.

In Europe, when the US markets opened, the main stock market indices were trading in negative territory, the announcement of the Bank of England’s 25 basis point rate hike not having had much influence on the trend.

In the macroeconomic sphere, registrations for unemployment benefits in the United States fell timidly by 1,000 last week, thus settling at 191,000 against 192,000 the previous week, which shows that the tension still remains on the market of the work.

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