The president of the Federal Reserve (Fed), Jerome Powell, pointed out in a forum at the Dallas Regional Chamber that the current strength of the economy provides the ability to make decisions cautiously. Although monetary policy is moving towards a more normal scenario after two rate cuts this year, Powell highlighted that the path to reach that point is not predetermined.
Powell emphasized that further cuts will be carefully evaluated based on incoming economic data, the evolution of economic prospects, and the balance of risks. This stance has resulted in a decrease in the probabilities of a rate cut, reflected in the futures of the Federal Reserve funds, which have fallen around 62%.
In the current context, where investors debate the continuation of the "rally" on Wall Street following Donald Trump's victory in the U.S. presidential elections, Powell's statements are particularly relevant. On the other hand, the Bureau of Labor Statistics reported a two-tenth increase in the inflation rate in October in the U.S., reaching 2.6% and breaking a six-month downward trend.
As for the sectors, energy and technology showed increases, while industrial and non-essential goods posted declines. Among the 30 largest listed companies on the Dow, Chevron, Apple, and 3M Co stood out, while Salesforce, Cisco, and UnitedHealth retreated. Disney was one of the stocks with the highest growth, closing with a 6.23% increase after reporting quarterly results better than expected.
Regarding the market close, Wall Street ended in negative territory, with the Dow Jones Industrial Average falling by 0.47%, the S&P 500 declining by 0.60%, and the Nasdaq dropping by 0.64%, in a session where the Dow Jones reached a decline of 250 points. Powell emphasized that the U.S. economy shows no indications of the need to lower rates rapidly.
