Powell ensured spring on financial markets. Stocks and gold at record highs

Listening to Jerome Powell's conference yesterday, one could have the impression that we were listening to a politician rather than the head of the central bank. In the opinion of the chairman FOMC Like probably most members of the Committee, the situation of the American economy is excellent, giving room for interest rate cuts along with faster economic growth, a stable unemployment rate and even slower inflation reaching the target.

All potential threats or inaccuracies in the data were, in short, downplayed by Jerome Powell, which gave the green light to financial markets to purchase assets of all kinds. Additionally, Powell mentioned that while there are no clear plans for reductions yet QT, but if necessary, appropriate actions will be taken, the markets have received this, as in June we will see a reduction in interest rates and a reduction in the reduction of the balance sheet total Federal Reserve. The current chances of a rate cut in June reach 66%.

A recap of Powell's comments and why April could be an amazing month for risky assets

To sum up yesterday's events, the Fed sees a stable unemployment rate, a strong US economy, no inflationary pressure from wage growth, and when liquidity problems arise, it will counteract them and there is still a chance for three rate cuts this year. Additionally, in April, the change in liquidity in the US financial sector will begin to increase rapidly, ending the base effect from March last year. We are also seeing a pullback in US bond yields at the short and long end and the potential for further USD weakening. The sum of these factors seems to be favorable for risky assets, and their accumulation will probably take place in April.

Gold, cryptocurrency shares

Gold broke an all-time record as real interest rates are still expected to fall, yields fell and the USD weakened. This is the sum of positive factors that gold can support in the long term. US stocks resisted the correction unlike cryptocurrencies and set new records on US indices, a kryptowaluty they have a chance to continue the trend in April after the last correction.

If we take the above factors into account and nothing unexpected occurs, we will probably have a beautiful market spring.