Shares flirt with highs on rate cut bets, gold at record
Business
Shares flirt with highs on rate cut bets, gold at record
NEW YORK/LONDON (Reuters) - Global stocks hovered near their highest in a month on Tuesday, drawing support from expectations that the U.S. Federal Reserve could offer further hints of imminent interest rate cuts and easing recession worries.
With the data calendar relatively light across major economies this week, all eyes are on Wednesday's release of the Fed's July meeting minutes and Chair Jerome Powell's speech at Jackson Hole on Friday for clues on the outlook for U.S. rates.
Fed policymakers have in recent days signalled possible easing in September, priming markets for a similar tone from Powell and other speakers at the annual meeting of global central bankers in Jackson Hole, Wyoming.
"Markets believe that once the Fed starts cutting rates it will pursue a predictable strategy of reducing them at every, or almost every, meeting over the next 12 months," said Nicholas Colas, co-founder of DataTrek Research LLC.
"While that might sound like an aggressive, even worrisome, expectation, consider that eight 25 basis point reductions would only take Fed Funds to 3.25% – 3.50%. That’s still above the Fed’s own estimate of the neutral rate of interest," Colas said.
