(Bloomberg) – The optimism on Wall Street was palpable as traders pushed stocks higher while bond yields took a dip. This shift came after a series of economic reports fell short of expectations, strengthening the argument for the Federal Reserve to consider rate cuts later this year.
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During a truncated trading session before the US holiday, the S&P 500 reached a record high as investors bet on lower rates to continue boosting Corporate America. Treasury yields rose uniformly. The dollar, on the other hand, remained weak following the release of minutes from the Fed’s June policy meeting, which revealed a cautious approach towards inflation and a lack of consensus on the duration of rate hikes.
According to Paul Ashworth of Capital Economics, the Fed minutes seem outdated in light of recent indicators pointing towards an economic slowdown. Michael Feroli of JPMorgan Chase & Co. described the minutes as favoring a dovish stance. There was a general consensus on the prevalence of disinflationary pressures, a loosening labor market, and an expected slowdown in economic growth, he added.
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2024-07-03 16:03:02
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