Fundstrat Head of Technical Strategy Mark Newton has noted on various occasions that the Federal Reserve under Chair Jerome Powell’s leadership has sought to avoid surprising or shocking the market, typically telegraphing its intentions ahead of each meeting of the Federal Open Market Committee (FOMC). This proved to be the case once again in the weeks and months leading up to the most recent FOMC yesterday (May 1).

At the beginning of 2024, the market had hopes that rate cuts might begin as early as March. That obviously did not happen, and since the previous rate decision, various Fed officials have signaled that there would be no cuts this month either.

Whether it was the San Francisco Fed’s Mary Daly suggesting that the first rate cut was “not going to be tomorrow, but it’s not going to be forever,” Loretta Mester of the Cleveland Fed telling a reporter that “I do not expect I will have enough information by the time of the FOMC’s [May 1] meeting to [warrant support for a rate cut]”, or New York Fed President John Williams telling a conference audience on April 18 that “I definitely don’t feel urgency to cut interest rates,” the message was clear.

After all, as Powell himself had said on April 3, “we have time to let the incoming data guide o...

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