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The Federal Reserve Holds Rates Steady, Will the Dollar Strengthen Further? What's the Impact on the S&P 500 Index?

Writer's picture: 鋼鐵 東育鋼鐵 東育

The Federal Reserve's decision to keep interest rates steady could allow the U.S. dollar to continue strengthening, potentially impacting the S&P 500 negatively, especially for multinational companies that dominate the index. With the Dollar Index already up nearly 5% this year, a strong dollar could erode the profits of these companies due to adverse currency exchange impacts. Experts from investment firms like Verdence Capital Advisors and Hartford Funds indicate that while the dollar's current strength has not yet had a significant market-wide impact, it's something investors need to watch closely. The Fed’s stance on not cutting rates soon, especially if inflation remains high, might delay any potential rate cuts to late 2024, maintaining the dollar's strength which could affect U.S. multinational companies' overseas earnings and competitiveness.

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