The major indices are trading higher as the US session gets underway. The gains are led by the NASDAQ index which is being pushed by lower yields.
Hopes that China exits their zero Covid policy is also a tail wind on hopes that supply chains ease.
The FOMC rate decision will take place tomorrow at 2 PM. The Fed is expected to raise rates by 75 basis points but are probably getting near the end of the rate hike cycle.
It still too early to tell how the economy will respond from a inflationary standpoint and growth standpoint.
My inkling is that the Federal Reserve will not be cheering on stronger stocks/stronger growth for fear that it reignite's inflation and keeps inflation well above the 2% target going forward. The difference between now and the past is that inflation moving up toward double-digit levels is not something to take lightly. Inflation begets inflation. If the genie gets out of the bottle, that cycle can continue.
A snapshot of the market currently shows:
- Dow industrial average up 219 points or 0.67% at 32948.10
- S&P index up 35.38 points or 0.91% at 3907.18
- NASDAQ index up 125 points or 1.14% at 11112
- Russell 2000 up 12.97 points or 0.71% at 1859.89
in the US debt market
- 2 year note is trading at 4.424%. That is down from a high yield of 4.639%..
- 5 year note is trading at 4.139%. That is down from a high yield of 4.504%
- 10 year bond is trading at 3.963%. That is down from a high yield of 4.335%
- 30 year bond is trading at 4.085%. That is down from a high yield of 4.423%