Fed Chairman Jerome Powell is expected to emphasize that the Fed is patient and will hold interest rates steady.
Federal Reserve Chairman Jerome Powell is expected to emphasize the Fed will continue to be patient and hold back from raising interest rates, but there is a risk the Fed could inject some volatility into markets in the week ahead.
Fed officials are sure to discuss Friday's surprisingly strong report of 3.2% economic growth in the first quarter, much better than the 2.5% pace expected by economists. It is also far better than the flattish growth forecasts and recession fears that cropped up during the first quarter when data looked spotty and the government was closed for five weeks.
The Fed has targeted a 2% inflation rate. Core PCE inflation for the first quarter fell to a 1.7% pace, year over year, from 1.9% in the fourth quarter. March inflation data is released on Monday. Emanuel said he expects the S&P 500, which surpassed its previous closing high of 2,930, in the past week, to reach a high of 3,000 this year. The S&P is up more than 3% in April so far, and earnings season has been mostly positive for stocks.
"If you look at the rebound, that is only four months old, the easy money has been made and the easy money has been made in technology," he said."From our point of view, we like the places investors have had a more difficult time." He said two of those sectors are health care and financials.
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