Markets mixed as Fed fails to signal “extensive sequence of rate cuts”

Markets were mixed on Wednesday.

The S&P 500 closed flat, as did the STOXX Europe 600. In Asia, the Shanghai Composite rose 0.3 percent while the Nikkei 225 fell 0.2 percent.

At its monetary policy meeting that concluded on Wednesday, the Federal Reserve cut the fed funds rate by 25 basis points to a range of 1.75 percent to 2 percent.

During the press conference following the meeting, Fed Chairman Jerome Powell said further interest rate moves would depend on economic conditions.

“If the economy does turn down, then a more extensive sequence of rate cuts will be appropriate,” he said. “We don’t see that. It’s not what we expect.”

Joseph Zidle, Blackstone's chief investment strategist, warned that failure by the Fed to follow through with more interest rate cuts could rattle markets.

“The markets are set up for a disappointment. They’re going to have to re-rate their expectations,” he said.