Fed meets, as Powell preparing to pluck the doves' wings

Stock investors kicked off the week on a cautious note, as the Federal Reserve (Fed) is expected to kill joy when it announced its latest decision tomorrow, and earnings announcements may not save the day. The S&P500 gave back 1.30% on Monday. US crude fell 2% yesterday and slipped below the 50-DMA this morning. Interestingly, however, the latest news on the macro front is not bad. The Chinese reopening is now well reflected through the first set of economic data. Released today, both the manufacturing and services PMI jumped into the expansion zone. And the cherry on top, the IMF raised its growth forecast for this year by 0.2% to 2.9% citing the resilience of US spending and the Chinese reopening. This is the kind of news that the energy markets normally cheer. But not this time, apparently. In the FX, the US dollar is gaining some positive momentum into the Fed meeting, as investors know that the Fed won’t declare victory over inflation despite the falling inflation, and position accordingly. The Fed will certainly hike by 25bp, but there is little chance it will announce the end of the tightening. But more importantly, Jerome Powell will likely reveal whether we have one more rate hike, or two more rate hikes to go before pause. And that simple ‘s’ could make all the difference. Listen to find out more!