Federal Reserve's Household Spending Downgrade Increases Market Volatility

Michael Markowski  |

iStockphoto, traveler1116

The 2:00PM press conference held by US Fed Chairman Jerome Powell at the conclusion of the January 29, 2020, Federal Open Market Committee (FOMC) meeting started out with a bang. Within minutes, the S&P 500 rallied to its high of the day. Shortly thereafter, the world’s leading stock index began to make lower highs and lower lows to close near its lows for the day. From its intraday high to its close, the venerable index declined by 0.60%.

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The S&P 500 declined steadily after the initial spike because Chairman Powell stated that US household spending had waned from “strong” to “moderate.” He also emphasized that inflation in the US was below the Federal Reserve’s target.

The volatility caused by the FOMC’s observation of a change in conditions for the US economy has increased the probability of a global market crash happening by the end of the first quarter of 2020. See also “Looking for Wuhan Virus To Cause Severe Market Correction or Crash,” from January 25, 2020.

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Equities Contributor: Michael Markowski

Source: Equities News

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


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