A busy few days. Stocks are unchanged this morning as investors prepare for a busy few days of news. The Federal Reserve (Fed) is slated to tie a bow on its year of policy pivots with its policy announcement later today, which will be followed by Fed Chair Jerome Powell’s post-meeting press conference. The Fed meeting is the first in a string of global macroeconomic events to watch. On Thursday, the European Central Bank is scheduled to release a policy decision, and the United Kingdom will hold a general election. The United States’ trade negotiations with China are also lingering, just four days before a tariff hike on $160 billion in Chinese goods is set to kick in.
The Fed on tap. Investors are positioning for the Fed to keep rates unchanged at this meeting after Powell signaled a pause in rate cuts at the October meeting. We don’t expect Powell to deviate from his messaging at the prior meeting, in which he emphasized that the current state of monetary policy is appropriate unless there is a material change in the economic outlook. The most interesting takeaway from this meeting could be policymakers’ fed funds rate projections (also known as the “dot plot“). The dot plot typically includes rate projections over the next few years, and forecasts could look different than what we saw in September. For a look back at the Fed in 2019, check out our December 10 LPL Research blog post titled “Four Fed Hikes, One Year Later”.
We still believe. In our new Market Signals podcast, We Still Believe in the Fundamentals, LPL Research Chief Investment Strategist John Lynch and Equity Strategist Jeff Buchbinder discuss why we think it’s important to keep our focus on the fundamentals of investing. Topics include the positive jobs report, a pause by central banks globally, and a U.S. consumer that continues to drive the economy, plus our guidance on positioning equities in 2020.
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