Stock Exchange: The Fed is about to shake up the markets!

As investors around the world hold their breath, the Paris Stock Exchange is gearing up for a decisive moment. The long-awaited speech by Fed Chairman Jerome Powell, scheduled for this Friday, could well trigger a market upheaval.

The CAC 40 in Waiting: A Temporary Surge?

This Friday, August 23, the Paris Stock Exchange still seems to be in good shape, with the CAC 40 inching up 0.44%, reaching 7,556.91 points.

This slight increase, though modest, reflects a certain optimism among investors. But is this momentum truly sustainable, or is it simply the calm before the storm? The answer may well lie in the words of Jerome Powell, who will have the opportunity to clarify the direction the Fed will take in the coming months.

The markets are hanging on the Fed Chairman’s every word. His speech could either support expectations of interest rate cuts in the United States or dash them completely.

Speculations are rampant, but one thing is certain: just a single word, or even a slight change in tone from Powell, could be enough to trigger a wave of market volatility.

Investors know that one misstep could be costly.

The Fed: Heading for an Interest Rate Cut or a Hard Stop?

Beyond the prevailing optimism, some observers fear that Jerome Powell might temper expectations of a significant interest rate cut.

Ipek Ozkardeskaya, an analyst at Swissquote Bank, points out that the Fed might consider a drastic rate cut unnecessary in the absence of severe economic slowdown or market tensions. This view is echoed in recent economic indicators.

On Thursday, the monthly survey of S&P Global’s purchasing managers (PMI) revealed an acceleration in U.S. services in August, a development that dampened the stock market’s momentum.

This unexpected growth could convince the Fed to maintain a more cautious approach, or even delay any significant rate cuts. Investors, already on edge, are scrutinizing every indicator to anticipate the central bank’s moves.

The Stock Market in Suspense: What Strategy for Investors?

As the Jackson Hole symposium is in full swing, the big question now is whether the Fed will announce a rate cut of 0.25 or 0.5 points in September.

The markets seem to be leaning towards the former, but nothing is set in stone yet. This uncertainty is keeping tensions high on the stock exchanges, where every percentage point becomes a matter of life and death for investors.

In the bond market, interest rates on European loans remain stable, but the nervousness is palpable.

France’s ten-year rate, for example, stands at 2.95%, compared to 2.96% the previous day. This relative stability actually hides a deep questioning: Will the Fed bow to market pressure, or will it hold steady in the face of a U.S. economy that, despite some warning signs, continues to show resilience? In the meantime, take advantage of the privacy offered by Monero.