The US stock market showed significant volatility last week. After the S&P 500 index fell by 3% on Monday, there was a 1% increase on Tuesday, restoring the Nasdaq's position. The VIX index, reflecting expectations of volatility, fell to 28 points after a peak of 60 points on Monday. These fluctuations influenced the forecasts for changes in the Fed's interest rates. The futures market expects a rate cut of 136 basis points in 2024 and another 97 basis points in 2025. Analysts believe that the current level of interest rates (5.25-5.5%) gives the Fed the opportunity to support the economy. They forecast a 50 basis point rate cut in September and a gradual 50 basis point decline over the remainder of 2024. The projected volatility of the S&P 500 in three months is now higher than in a year, indicating growing concerns that the Fed may make a mistake in its monetary policy. Despite the weak employment data, analysts consider the probability of a recession to be minimal. They predict a mild slowdown in economic growth in the United States, with growth rates reaching a minimum just below the long-term average.
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