As investors around the world hold their breath, the Paris Stock Exchange is preparing for a decisive moment. The long-awaited speech by Fed Chairman Jerome Powell, scheduled for this Friday, could well send an earthquake through the markets.
The CAC 40 on Hold: A Temporary Rise?
This Friday, August 23, the Paris Stock Exchange still seems to be in good shape, with the CAC 40 gaining 0.44%, reaching 7,556.91 points.
This slight increase, although modest, reflects a certain optimism among investors. But is this momentum really sustainable, or is it simply the calm before the storm? The answer may well lie in the words of Jerome Powell, who will have the opportunity to clarify the direction the Fed is taking in the months ahead.
Markets are hanging on the Fed chairman's every word. His speech could either reinforce expectations of rate cuts in the United States or dash them in a sudden blow.
Speculation is rife, but one thing is certain: the slightest word, the slightest inflection of Powell's voice could be enough to trigger a wave of volatility on the markets.
Investors know that a misstep could cost them dearly.
The Fed: Towards a rate cut or a brake?
Beyond the ambient optimism, some observers fear that Jerome Powell will come to temper expectations of a massive drop in rates.
Ipek Ozkardeskaya, analyst at Swissquote Bankpoints out that the Fed may judge that a drastic rate cut is not necessary in the absence of a serious economic slowdown or market stress. This view finds some echo in the latest economic indicators.
On Thursday, S&P Global's monthly purchasing managers' survey (PMI) showed an acceleration in U.S. services in August, news that dampened momentum in stock markets.
This unexpected growth could convince the Fed to maintain a more cautious approach, or even to postpone any significant rate cut. Investors, already nervous, are scrutinizing every indicator to anticipate the central bank's movements.
The stock market in suspense: What strategy for investors?
With the Jackson Hole symposium in full swing, the big question now is whether the Fed will announce a rate cut of 0.25 or 0.5 percentage points in September.
The markets seem to be leaning overwhelmingly towards the first option, but nothing is decided yet. This uncertainty contributes to maintaining tension on the stock markets, where every percentage point becomes a matter of life or death for investors.
On the bond market, interest rates on European bonds remain stable, but nervousness is palpable.
France's ten-year rate, for example, stands at 2.95%, compared to 2.96% the day before. This relative stability actually hides a deep question: will the Fed bend under pressure from the stock market, or will it hold its course in the face of a US economy that, despite some warning signals, continues to show signs of resilience? In the meantime, take advantage of the confidentiality offered by Monero.
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