Expectations of Fed rate cut trigger market turmoil
After Christmas in 2023, global financial markets fluctuated due to expectations of an interest rate cut by the Federal Reserve. As the Federal Reserve acted to ensure that the gap between the federal funds rate and actual inflation was not too wide, the market was in a state of "ice and fire": the dollar weakened, but U.S. stocks ended strongly.
U.S. dollar index trend analysis
Recently, the U.S. dollar index has fallen, mainly affected by expectations of an interest rate cut by the Federal Reserve. Analysts generally expect the U.S. economy to slow down significantly in 2024, but the Federal Reserve may take steps to mitigate the risk of a hard landing. Data released last Friday showed that U.S. prices fell for the first time in 3-1/2 years in November, with annual inflation falling further below 3%, boosting market expectations for an interest rate cut in March 2024.
U.S. stock market performance
Despite weaker trading volume, the U.S. stock market is still on an upward trend, with the Dow Jones, Nasdaq and S&P 500 all recording their eighth consecutive week of gains. This is likely to continue, especially driven by expectations that the Federal Reserve will cut interest rates next year. Analysts said that despite market uncertainty, the upward trend in U.S. stocks is likely to continue to boost major stock indexes.
Wall Street is divided on the future trend of U.S. stocks
Wall Street is divided on the direction of the U.S. stock market in 2024. Some institutions will continue to rise strongly in U.S. stocks. For example, Goldman Sachs predicts that the S&P 500 index will reach 5,100 points by the end of 2024. However, JPMorgan Chase and BCA Research have taken a pessimistic stance and the S&P 500 Index will fall sharply.
Economic experts warn the market
Mark Spitznagel, the founder of the black swan fund Universa Investments, warned that the U.S. stock market is coming, believing that the United States is in the "largest credit bubble in human history" and this market may be more serious than in 1929.
Summary and Outlook
The Fed's policy changes have had a significant impact on global financial markets. Although the dollar weakened, the U.S. stock market showed a strong finish. However, Wall Street has significant differences on the U.S. stock market in 2024, and the market still faces many uncertainties. The future policy direction of the Federal Reserve will be a key factor affecting market trends.
Keywords: Federal Reserve policy, U.S. dollar index, U.S. stock market, interest rate cut expectations, economic slowdown, inflation data, stock market, market warning.
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