Although the market was a little shaky after the Fed spoke on Wednesday, the S&P500 ended the week flat-to-up thanks to Friday, May 3rd’s rebound.
According to the CME website, the odds of a rate cut (or the Fed lowering interest rates) are actually around 47% by Dec 2019 and move to above 50% by January 2020. Before the Fed meeting, the market was actually banking on the Fed lowering interest rates. Data showed a 65% chance of a rate cut in December from last week, April 26th.
It wasn’t until the Fed spoke on Wednesday did this begin to subside.
When I think about “Where will stocks go from here”, it seems to me that if the market is baking in a a large chance that there will be a cut to rates, they may be disappointed this year. If rates actually trend up on a stronger economy, we all say the tantrum the market threw last year.
See my post on the market at these levels here