Federal Reserve Chair Jerome Powell’s remarks at the Jackson Hole Symposium stated what the market had long been aware of, effectively plunging the stock market into a state of uncertainty: Inflation is receding from its peak but remains elevated, prompting rate setters to be prepared to tighten policy again when deemed necessary.
As a result, investors will resume the scrutiny of economic data, a sentiment that Mohamed El-Erian, Chief Economic Advisor at Allianz, believes Powell shares.
For the stock market, this cautious stance isn’t welcome news.
Both the failed breakout in July and the current short-term downward trend have emitted bearish signals, with the current momentum appearing negative.
Quantitative investors, one of the stock market’s primary drivers in recent months, have shifted from aggressive buying of stocks earlier this year to becoming sellers.
