The last FOMC minutes signal that the Fed will not stop hiking interest rates until inflation is firmly on the path to 2%. The Fed officials agree that they will need to raise interest rates by 50 bps at their next two meetings. However, after that, the Fed will likely be very data-dependent.

Investors have been worrying about a coming US recession as earnings from Walmart and Target signal that discretionary consumer spending could be falling. So, if the US economy does take a further turn slower then a September pause in hikes could be ahead.

Would that mean that the S&P500 could start to gain again early in anticipation of a Fed on pause?

The S&P500 seasonals tend to strongly favour gains into year-end. Over the last 25 years, the S&P500 index has gained 19 times between October 08 and December 31. The largest gain was 28.12% in 1998. Are there more gains to come again this year on expectations of the Fed hitting pause on hikes around September?

Major Trade Risks: Any significant news that changes the monetary policy outlook for the Fed like surging inflation that requires more rate hikes will change this outlook.

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