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Fed Shift Fuels Wall Street Rally
27 Nov
Summary
- Wall Street rebounds strongly on dovish Fed signals.
- Rate cut probability for December 10 jumps to 83%.
- Kevin Hassett favored as next Fed Chair, signaling lower rates.
Equity markets on Wall Street experienced a robust rebound, recovering significantly after last week's downturn. This upward trend was largely propelled by dovish statements from Federal Reserve officials, which sharply increased the market's expectation for a December 10 rate cut to 83%. Benchmark indices, including the Dow Jones, S&P 500, and Nasdaq, extended their rally for a fourth consecutive day, signaling renewed investor confidence.
Further bolstering market sentiment were reports indicating that Kevin Hassett, White House Economic Council Director, is the leading candidate to become the next Federal Reserve Chair. Hassett's known advocacy for lower interest rates, aligning with President Trump's agenda, has intensified speculation about a shift in monetary policy. He has openly stated his inclination to cut rates if he were currently in the position.
Brokerages have begun to issue optimistic forecasts for the S&P 500, with targets set by Deutsche Bank, JPMorgan, and Societe Generale for the end of 2026 and the next 12 months, respectively. While the US Dollar index remains subdued and gold prices hold firm, the markets are anticipating potential rate reductions under Hassett's possible leadership, aiming for sub-3% interest rates.
