BancaMarch: Powell’s first press conference of the year. At this meeting, the top US monetary authority will try to buy time in the face of the markets, reaffirming the message of caution in the face of inflation far from the 2% target and a resilient economy. We do not expect any changes in interest rate policy and it does not seem to be the time to announce anything regarding the balance sheet reduction plan. In this case the nuances of the speech and whether there is any change of language in the press release will be important.
For their part, the markets remain optimistic about rate cuts that would begin at the March or May meeting, something that seems unlikely given the stabilisation in the pace of inflation reduction, a labour market that is still very tight, and an economy that is not losing steam.
As for the stock markets, the lack of definition and concreteness regarding the business plans around artificial intelligence of the two big technology companies (Alphabet and Microsoft) left the markets a little bewildered. Both companies fell in the after market, although the worst part was borne by Alphabet (-6%). Likewise, Nasdaq futures point to moderate falls at the start of the European session.
