Jun 15, 2023

After the Federal Reserve paused its rate hike cycle at ten, the US30 fell, reversing earlier gains. However, the Nasdaq rose 0.7% following the news.

US30 – Daily Chart
Daily Chart for the US30

The price of US30 rose following the Fed announcement, but fell later in the day, with the 34,250 resistance level remaining in place.
The coming days could be critical for the index, with a correction taking place.
The US Federal Reserve decided not to implement an eleventh rate hike, instead waiting to see how the economy reacts before putting additional pressure on households and businesses.

The FOMC and Fed Chair Jerome Powell kept borrowing rates unchanged at 5-5.25%. The recent pause was caused by a drop in the latest consumer inflation reading to 4%. Core inflation remains a concern, which the FOMC stated could necessitate additional rate hikes this summer.
“The committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerged that could impede the committee’s goals,” according to a statement. Fed officials now expect interest rates to be 5.6% by the end of the year, putting an end to hopes for rate cuts.

“Nearly all” officials “expect that it will be appropriate to raise interest rates slightly further by the end of the year,” Powell said. “However, given how far and how quickly we’ve moved, we judged it prudent to pause to assess additional information” at this meeting, Powell said.
“We understand the hardship caused by high inflation, and we remain strongly committed to bringing inflation back down to our 2% target,” Powell said at a news conference. “The process of bringing inflation down will be gradual — it will take some time.”
Investors should keep an eye on the US30 resistance level for a possible pullback in the coming days.

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