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Bespoke Analyst Paul Hickey Dampens Market Expectations for Fed Rate Cut: The Real Driver Behind U.S. Stock Market Gains

Analyst warns that Fed rate cut may negatively affect stock market outlook

Bespoke Analyst Paul Hickey Dampens Market Expectations for Fed Rate Cut: The Real Driver Behind U.S. Stock Market Gains

U.S. Federal Reserve Board Chairman Jerome Powell recently announced that interest rates will remain unchanged, quelling concerns of a possible rate cut that typically signals economic trouble. While many investors are eagerly awaiting a rate cut from the Federal Reserve this year, Paul Hickey of Bespoke cautioned that this may not necessarily lead to the market boost that some are hoping for.

Despite the anticipation for a Fed rate cut, Hickey pointed out that the current market performance, with major U.S. indices reaching all-time highs, has little to do with central bank actions. He highlighted that recent stock market gains are more likely due to the influence of artificial intelligence, with developments like ChatGPT’s announcement in late 2022 playing a significant role in the rally.

Looking ahead, Hickey suggested that earnings reports may pose a greater risk to the stock rally than the absence of a Fed rate cut. He pointed to market reactions during last week’s earnings reporting as an indication that the stock market’s performance may be more closely tied to company performance rather than central bank policies.

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