JPMorgan's Fed Day Scenario Analysis: Stocks Could Drop As Much As 1.25% Or Rise Up To 2.5%

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by Tyler Durden
Tuesday, May 02, 2023 - 04:41 PM

Ahead of tomorrow's FOMC, where everyone expects a 25bp hike with most also expecting Powell to hint at a pause, if not outright announce the end of the tightening cycle from Powell (more in a full Fed preview post out shortly) since the Fed will already be in possession of the dire SLOOS report which will be made public next weel, in the table below JPM strategist Bram Kaplan analyzes the option implied moves on various asset classes, compared to the average realized moves during historical FOMC announcement days over the past year (i.e. since the start of the current hiking cycle).

Incidentally, JPM's chief economist Michael Feroli sees a 25bps hike and then ~1/3 chance of a hike in June. He does not see any changes to QT (more on that also in the full preview later).