The prospects for an interest rate cut next March have been significantly reduced.
The most important points that came out at Powell's press conference are:
1- the Fed will cut interest rates only when it gains greater confidence that inflation will reach the 2% target.
2- Powell said it is likely that we will not have enough confidence to cut interest in March. The probability of a rate cut in March was reduced to about 35% after the meeting,
at the same time the total reduction in interest rates for this year is expected to reach about 140 basis points. So now it's up to the data to support this argument or rule it out.
This will be what traders should pay attention to in the coming weeks are the data,
which we will start starting from tomorrow as the US jobs report tomorrow will be one of the big data that traders should look at.
That will be the first step in determining how strong Powell's guidance was yesterday, and we will see his reaction to the labor market data tomorrow.
