With interest rate hikes in Jerome Powell’s rearview mirror, Wall Street starts a new guessing game: Timing when the Fed will cut

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The Federal Reserve has made it official: The aggressive interest rate hikes of the past 18 months have mostly tamed the inflationary storm that caught policymakers off guard in the wake of the pandemic, while the labor market has largely shrugged off the consistent recession predictions from Wall Street, and GDP continues to expand.

Even Fed Chair Jerome Powell isn’t dampening the mood of Wall Street bulls, some of whom, after two surprisingly positive inflation reports, now say there’s an “immaculate disinflation” underway. On Wednesday, Powell touted the immense “progress” taming inflation and declared the Fed at or near the peak rate for this cycle in a dovish tone that was music to the ears of Wall Street.