FED Decision Looms as Wall Street Rallies on Record Highs

The Federal Reserve faces a critical juncture as markets brace for a potential 25-basis-point rate cut. Inflation remains stubbornly high, driven by tariffs and rising costs across key sectors, while jobless claims hit a four-year peak. Chair Jerome Powell must navigate the delicate balance between price stability and employment growth.

Wall Street remains undeterred, with the S&P 500 and Nasdaq posting their strongest weekly gains since August. Treasury yields dipped, and Gold surged as traders anticipated the central bank's move. Major institutions like Deutsche Bank and Wells Fargo have raised their S&P 500 targets, citing resilient earnings and AI-driven growth.

Labor market data adds pressure, with payroll growth slowing sharply. The Fed's decision could either mitigate a deeper downturn or risk reigniting inflation—a dilemma with far-reaching implications for risk assets.