Dow Jones Rebounds on Fed Rate Cut Speculation Amid Weak Consumer Sentiment
The Dow Jones Industrial Average surged over 1% Friday as renewed expectations for Federal Reserve rate cuts fueled market optimism. New York Fed President John Williams, a key ally of Chair Jerome Powell, signaled openness to near-term policy adjustments toward a neutral stance, citing labor market fragility as a greater concern than inflation.
Rate cut probabilities for December's FOMC meeting jumped to 69.5% following Williams' remarks, nearly doubling from yesterday's 39.1%. "When Powell, Williams, Waller and Miran all favor a December rate cut, this powerful consensus from Core leadership makes a cut much more likely," said Wellington-Altus strategist James Thorne.
The policy pivot comes against a backdrop of weakening consumer sentiment, with the University of Michigan's gauge continuing to reflect economic unease. Market participants now await confirmation of this dovish shift at upcoming Fed communications.
