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Fed in Focus – Hawkish Pause or Dovish Hike?

The S&P 500 index has once again entered a bull market. On Thursday, the index closed 20% higher from its recent lows. An overly aggressive Fed is the only thing that might cause everything to fall apart.

June 11, 2023

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On Friday, Wall Street scaled to new 2023 highs on rising bets that the Federal Reserve would skip a rate hike which outweighed concerns about a drain on liquidity from the plethora of Treasury issuance in US markets.

That helped to propel world stocks to a 13-month peak. According to Refinitiv data, the S&P 500 has gained 20% from its low on October 12.

The most widely recognised definitions of bull and bear markets are a 20% increase from the latest low and a 20% fall from the latest high.

The market expects the Fed to pause its most aggressive raising cycle since the 1980s and leave rates stable in the 5% to 5.25% range on June 14.

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