Market Extra: What Fed Chair Powell can say to keep the stock-market rally going — or kill it

by | Oct 31, 2022 | Stock Market

Whatever Federal Reserve Chairman Jerome Powell says when he steps up to the podium on Wednesday will likely have ramifications for financial markets. But what do equity investors need to hear from the Fed chair to keep the rally going? Market strategists who spoke with MarketWatch have a few thoughts.

Most important, anything Powell says to harden expectations for a 50 basis-point interest-rate hike in December would likely push prices for stocks and bonds higher, said Jake Jolly, senior investment strategist at BNY Mellon. Bond yields fall as prices rise, and vice versa. On the other hand, anything that leaves investors with the impression that another jumbo interest-rate hike remains a possibility in December could have the opposite effect. “What’s going to be most critical is how much [Powell] tells us about December,” Jolly said. “If Chair Powell is relatively quiet and doesn’t want to discuss his thinking, to me that could be hawkish,” Jolly said. “That means it will remain a very data-dependent decision.” “Markets like certainty, they don’t like ‘wait and see,’” he said. Read: Another jumbo Fed rate hike is expected this week — and then life gets difficult for Powell Powell and his fellow policy makers are widely expected to …

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