With the Federal Reserve likely to keep interest rates on hold the rest of this year, many investment pros expect the dollar to remain weak, oil prices to keep rising—and stocks to head even lower.
“It’s not going to be a fun summer,” says David Rovelli, head of US equity trading for Boston-based Canaccord Adams. “There’s low volume, the Fed’s not going to do anything because of the election, there’s no catalyst and we’re just drifting in nowhere land.”
The central bank announced Wednesday it was holding its key short-term rate at 2% and gave no hint that it might boost rates soon to ward off growing inflation.
As a result, the dollar is likely to remain lower against foreign currencies, which whets investor appetite for dollar-denominated commodities, specifically oil. Stocks, in turn, aren’t expected to rally—even from their current low levels—until the Fed signals a change in interest-rate policy.
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