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Volatility and mixed sign on Wall Street: the Fed anticipates 0% rates until 2022

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Volatility and mixed sign in Wall street after the words of the Federal Reserve (Fed). The central bank has anticipated in its economic forecasts that will keep rates at the historic low of 0% -0.25% until 2022. It has also maintained its commitment to unlimited stimulus to cope with the impact of the pandemic by confirming that it will continue to buy assets "at least" at the same rate as it has been up to now. We recall that on Tuesday, the Nasdaq set a new record high at 10,000 points and which is now quoted at 10,051 integers, with a rise of close to 1%.

Central Bank President Jerome Powell has spoken about the American economy and its prospects, now that it seems that the worst is definitely behind us. Among other things, it anticipates that the unemployment rate will drop to 9.3% at the end of 2020.

Regarding the purely economic sphere, the Fed forecasts a GDP fall of 6.5% in 2020 and a rebound of 5.5% in 2020, while it anticipates that PCE inflation will drop to 0.8% in 2020.

"Given the unprecedented steps taken by the Fed, the question for investors is how long will these policies lasthow long will rates stay at zero and how does the Fed want the rate curve to look, "says Mark Holman, CEO of TwentyFour AM, Vontobel AM boutique.

"The forward guidance in this context it is very useful from the perspective of fixed income, but also very useful for companies and the economy in general, since they should be able to invest with confidence in cheap loans for a time, and end their financing at very cheap levels " , adds this expert.

Within the business front, the advancement of titles such as Amazon, Netflix, Apple and especially Tesla, than has exceeded $ 1,000 for the first time in its history. Donald trump He has taken his chest on Twitter and has boasted of Nasdaq's all-time highs.

In this regard, the flight of legendary investors on Wall Street is taking place lately. Buffett, Tepper, Grantham … all of them believe that we are before "a false rally that will end very badly".

Across the Atlantic, losses have gripped the Ibex and the rest of Europe. In Asia, the stock markets have closed mixed after Chinese inflation has been below expectations.

TECHNICAL ANALYSIS AND OTHER MARKETS

In other markets, the West Texas oil up 0.21% to $ 39.02. Besides, the ounce of gold rises 1.47%, to $ 1,747, while the euro 0.41% is appreciated and it is changed to $ 1,1387. Finally, the profitability of 10-year American bond falls to 0.79%.

And by technical analysis, the Nasdaq redraws new all-time highs "after up 46% from the lows of the month of March and looks like it could continue its bullish climb"explains César Nuez, analyst at Bolsamanía.

"The first objective of rise is in the 10,200 points, prices that we believe could end up being reached in the next few days. The first level of support is in the 9,182 points. We will not see a sign of weakness as long as it continues to trade above this price level, "adds this expert.

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