Is there a "Powell put"?
Equity market investors react strongly and positively to any rate cut announcements made by the Federal Reserve, to the point that they react negatively to good figures on the US economy that could prevent the Federal Reserve from lowering its interest rates. Accordingly, we ask the question: is there a "Powell put", a Federal Reserve commitment to cut interest rates to prevent a downward correction in the equity market? We remember that in the late 1990s, investors believed in the "Greenspan put", which had led to the equity market bubble and then to the bursting of this bubble in 2000. The Federal Reserve may actually have as one of its objectives to support the equity market, given the scale of equity wealth effects in the United States. But it does not have the means, not more than in 2000, to prevent a fall in the equity market if any kind of shock (falling growth, geopolitical crisis, etc.) triggered it .