Stock futures Sail Higher – Traders Prepare for Fed Decision
US stock futures rose on Wednesday morning. Investors awaited the Fed latest monetary policy decision amid rising inflation and the still-tight US labor market. Contracts on the Dow, S&P 500, and Nasdaq increased in pre-market trading. Treasury income was stable, and the benchmark 10-year interest rate was below 3%, Close to the highest level since 2018.
Investors expect a Federal Reserve monetary policy statement from Jerome Powell. The central bank may raise interest rates by 50 points for the early time since 2000. Such a boost will be twice the 25 basis points launched by the Fed in March. Which in itself was the first rate increase since 2018. This will bring the Federal Funds interest rate target range from 0.75% to 1.00%; 0.25% to 0.50% compared to the current range.
The expectation of this excessive increase in interest rates has been for weeks. Against the backdrop of market participants, especially given the comments of key Federal Reserve officials who support such a move. Speaking to the International Monetary Fund earlier this month, Powell said he believes it is advisable to move a little faster to raise rates. The Fed will also use the May meeting to launch a quantitative easing or seize assets from the central bank’s $9 trillion balance sheet.
Stock Futures and The Fed
The prospect of greater interest rates has governed evaporation in stock markets. They have been accustomed to ultra-low interest rates for the past two years. At the same time, however, many experts suggest that the federation has allowed the pandemic-era policies to be extended. This allowed inflation to reach its fastest pace since the 1980s after the GDP rise in the US became gloomy in the early three months of the year. The question endures whether the Fed can tighten policies without shifting the economy into a wide recession.
As the market raised interest rates by 50 basis points at the May meeting of the Federal Reserve, The focus will immediately shift to how much half-point growth the Fed expects on the 2022 balance sheet.
According to experts, the credibility of the Federal Reserve Bank stands. Given the growth in inflation, which is nothing further than a transition. Uber has released its first-quarter estimates and current quarter guidelines. The travel company indicated it was working on a shortage of drivers while maintaining solid profitability.
According to data compiled by Bloomberg, revenue doubled in the first quarter to $6.9 billion. EBITDA increased to $168 million. Travel in the first quarter increased by 18% compared to last year and reached 17.1 billion.
In the current quarter, Uber said it sees total bookings between $28.5 billion and $29.5 billion; And adjusted EBITDA from $240 to $270 million. Uber shares traded reduced after initial trading results. Earlier, Uber stocks dropped due to sympathy for Lyft shares declined after the travel company offered a revenue and profit forecast for the current quarter that fell short of analysts’ expectations.
