June S&P 500 E-Mini futures (ESM24) are up +0.58%, and June Nasdaq 100 E-Mini futures (NQM24) are up +0.77% this morning after Federal Reserve Chair Jerome Powell appeared to rule out the possibility of further interest-rate hikes, while investors looked ahead to a new round of U.S. economic data and an earnings report from tech giant Apple.
As widely expected, yesterday the Federal Reserve kept interest rates steady for the sixth straight meeting, leaving the federal funds rate target range at 5.25%-5.50%, the highest since 2001. The central bank noted that there “has been a lack of further progress toward its 2% inflation goal in recent months.” “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the Fed said in its monetary policy statement on Wednesday. Fed officials also detailed plans to slow the pace at which the central bank is reducing its asset portfolio. The Fed will reduce the cap on runoff for Treasuries to $25 billion per month from $60 billion beginning in June. “So far this year, the data have not given us greater confidence” that interest rate cuts are appropriate, Fed Chair Jerome Powell said during the post-meeting press conference. Powell added that gaining confidence to reduce interest rates will require more time than initially anticipated. However, the central bank chief also said it was unlikely that the Fed’s next move would be a rate hike.
