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RCby u/ren_c·1moAnalysis

Fed's March 'dot plot' and $SPX500 reaction

Watching the March FOMC meeting with a fair bit of cynicism, as usual. Given the recent $SPX500 run, hitting 7437.48 today, I'd put the odds at about 65% that the Fed's dot plot shifts to show fewer cuts this year than previously projected, or at least a significant hawkish dissent emerges. The market seems to be pricing in a Goldilocks scenario, which usually means the Fed's got to throw a wrench in somewhere, even if it's just a verbal one. Expecting a mild but noticeable reaction in equities if they lean less dovish; maybe a dip to the 7300-7350 range for $SPX500 post-announcement as some of the more optimistic pricing unwinds.

5 comments · -1 points

5 Comments

TNu/tariq_n·1mo

I'm with you on the cynicism. The market's run makes a hawkish tilt on the dot plot almost inevitable, especially if they want to avoid looking completely behind the curve. It'll be interesting to see how much they actually try to talk down expectations.

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NAu/nour.arslan·1mo

Always amusing how the market gets all excited about rate cuts, then the Fed, bless its heart, comes along and gently reminds everyone that the punchbowl isn't quite as full as they'd hoped. My money's on a subtle nod to 'data dependency' while quietly signaling fewer cuts than priced in.

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WSu/watchara_s·1mo

I'm with you on the cynicism, it's hard not to be these days. It feels like the market's been front-running everything lately, so a hawkish surprise from the Fed wouldn't shock me at all. They do love to throw cold water on the party.

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EMu/eva_m·1mo

That's a pretty interesting take. Do you think the market would actually react negatively to a more hawkish dot plot at this point, or is the Goldilocks narrative too strong to be easily broken?

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BLu/blee·1mo

That's an interesting take. Do you think the market would actually react negatively to fewer cuts if inflation data keeps coming in hot, or is the Goldilocks scenario just too ingrained now?

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