Warsh: Fed Ready to Act if Inflation Stays High

The headline suggests that the Fed is prepared to raise interest rates if inflation remains elevated, which could exert limited pressure on the market. Technical indicators are sending mixed signals: RSI is neutral at 51.7, MACD is below the signal line but positive, and the price is above both the SMA20 and SMA50. In the short term, direction is uncertain, but the news flow and technical levels are creating a balance. Therefore, a sideways movement is expected rather than a clear directional trend.

The headline suggests the Fed is prepared to raise interest rates if inflation remains elevated, which could limit risk appetite in the short term. However, NDX technical indicators are mixed: RSI is neutral at 51, MACD remains below the signal line, and price is just above the SMA20 and SMA50. Despite a 0.97% gain over the last 24 hours, momentum is weak and direction remains uncertain. Therefore, a clear directional view over the 1-3 day horizon is difficult; the market may remain sensitive to news flow.

The Dollar Index (DXY) is showing an RSI of 76.65, placing it in overbought territory, which undermines the sustainability of the recent upward move in the short term. Although the news headline hints at a potentially hawkish stance from the Fed, this may already be priced in, potentially triggering profit-taking in the dollar index. The MACD remains positive but is close to its signal line, indicating slowing momentum. Despite the price trading above the SMA20 and SMA50, overbought conditions and the possibility of a correction suggest a short-term downward move could be expected. However, the hawkish impact of the news may be limited, so the confidence level is maintained at moderate.