When the Fed Chair Talks, People Listen
Provided by MidAmerica Financial Resources
The financial markets are on edge this year each time Fed Chair Jerome Powell takes the podium following a Federal Open Market Committee (FOMC) meeting.
The Standard & Poor’s 500 stock index has gained or lost an average of 1.9% following the first six two-day FOMC meetings in 2022. And after the most recent November 2nd meeting, stocks see-sawed throughout the session but eventually ended the day sharply lower after hearing from the Fed Chair.
Initially, investors cheered when the official FOMC statement suggested that the Fed would consider all data before adjusting rates again. But Powell crushed the enthusiasm in his post-meeting press conference, saying the current inflation data did not support any change in the Fed’s position.
In many ways, Powell’s tough talk is understandable. Throughout 2021, he told investors that inflation was “transitory” and the FOMC made no change to monetary policy. But in 2022, inflation has been stubbornly high, and it’s the Fed’s job to maintain price stability. So, in some ways, Powell wants to restore the Fed’s credibility.
As you may have heard it said “Don’t worry about the horse; just load the wagon.” Now is a time to stay focused on “your wagon,” and we’ll keep an eye on the “horses” at the FOMC.
MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@lpl.com www.mid-america.us
Securities and advisory services offered through LPL Financial, a Registered Investment Adviser, Member FINRA/SIPC.
MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to LPL.
This material was prepared by MarketingPro, Inc. for use by MidAmerica Financial Resources.
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