Cooling Inflation May Force Warsh's Divided Fed to Hold Rates

Although the headline raises the possibility of the Fed pausing interest rate hikes, this creates a mixed signal for the stock market. Technical indicators show a weak outlook: RSI at 39 is near oversold territory, MACD is negative and below the signal line. The price is trading below the 20-day and 50-day moving averages, having lost 1.6% in the last 24 hours. With short-term momentum to the downside, there is a risk of the downtrend continuing. However, cooling inflation could be positive in the long term, so I maintain a moderate confidence level.

The headline highlights a divided outlook within the Fed regarding its interest rate decision, with the possibility of a pause as inflation cools. This situation may create uncertainty in the market rather than providing a clear directional signal. On the technical indicators, the RSI at 53 is in neutral territory, the MACD is slightly below the signal line, and the price is above the SMA20 and SMA50, supporting the likelihood of a sideways movement in the short term. Although the 0.46% increase over the last 24 hours shows limited positive momentum, the news flow and Fed uncertainty could constrain the continuation of this move. Therefore, there is no clear signal for a directional forecast over a 1-3 day perspective.

The news headline suggests the possibility of the Fed pausing its rate hike cycle, which could create a mildly positive risk appetite in the market. However, NDX indicators are sending mixed signals: RSI is neutral at 56, MACD is below the signal line, and the price is above both the SMA20 and SMA50. In the short term, directional uncertainty persists, so a sideways movement is more likely than a clear upward or downward trend. The market is focused on the Fed's decision and inflation data, so the impact of this news may remain limited.

The news headline suggests that cooling inflation and the possibility of the Fed pausing interest rate hikes could put pressure on the dollar index. Technical indicators also support this view: RSI is in the weak zone at 42.5, MACD is below the signal line, and the price is below both the SMA20 and SMA50. In the short term, selling pressure is likely to continue, but the pace of decline may be limited as the price closed at 99.68 and is approaching the support zone around 99.50. Overall, the dollar index is expected to follow a slightly negative trend within 1-3 days.