Week Ahead: Fed In Focus; Equities Rise But 3 Headwinds Could Still Upend Markets – Investing.com

Week Ahead: Fed In Focus; Equities Rise But 3 Headwinds Could Still Upend Markets – Investing.com

Markets are likely to remain in some sort of holding pattern to start the trading week, ahead of from the US Federal Reserve's which ends on Wednesday. Though no rate hike is expected, there appears to be widespread consensus that, after Friday's inflation data release showed the largest annual gain for since 1982, the central bank will have to speed up its tightening efforts.

It all comes down to the language Fed Chair Jerome Powell will use to describe the Fed's next moves. That will likely determine the sustainability of the new highs hit by three of the four major US indices on Friday—the , and .

If Powell sends a straightforward message that the central bank intends to accelerate the tightening process, expect sharp selloffs. However, if he provides a more dovish update, as he has done in the past, by saying the Fed is patient and will act slowly—whether or not that ends up being the case—investors will probably stay the course and lift equities yet higher.