10 Jan , 2023 By : Monika Singh
US Fed Chair Jerome Powell is speaking on Tuesday and the stock market investors will be looking for cues for the market direction. The last time when Powell spoke, the markets tanked. On January 10, Powell will speak at the Sveriges Riksbank International Symposium on Central Bank Independence, Stockholm, Sweden at 9:00 a.m. ET.
US equities on Monday ended lower than the previous week’s closing. After two Federal Reserve officials hinted that interest rates could rise above 5%, a stock market surge came to a halt, and speculators who anticipated a peak below 5% were given cold water.
The head of the Fed Bank of San Francisco, Mary Daly, predicted that the central bank would increase interest rates to around 5%. Raphael Bostic, her colleague in Atlanta, stated that policymakers should increase interest rates above 5% by the beginning of the second quarter and then remain on hold for “a long period.”
US CPI data for December to be released on January 12 could hold the key to Fed’s monetary action. Although inflation is cooling down, the core inflation is still appearing untamed and the job sector is not showing much impact of rate hikes.
On January 31 – February 1, the US Fed officials meet for declaring the rate hike. Markets are expecting 25 basis points of a hike but the inflation data for December will become important for that.
Corporate earnings season kicks off this week and investors will be focusing on the management commentary and guidance more than the balance sheet numbers of the previous quarter. Fed has the task at hand to avoid any hard landing if the economy, whether it is able to do so, only time will tell.
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