US equities closed lower yesterday but futures point to a strong rebound
The Fed stuck to the script yesterday with Powell reaffirming two key points:
- The Fed is not close to consider tapering bond purchases just yet
- Transitory inflation above 2% would not cut it in terms of convincing them to start more aggressive tightening in policy
As such, it keeps the Goldilocks scenario in equities well intact - barring any major uptick in Treasury yields back towards 1.75% and beyond that is.
That said, given such frothy levels, things may not be as straightforward for equities in the weeks/months ahead. The S&P 500 touched 4,200 yesterday, which is seen as a year-end target for a number of firms.
I would not discount bouts of volatility that could follow but in the event of any major dip, I don't see any other play besides buying that up - at least for now.