The Dow Jones Average and the S&P Index declined 0.7% and 0.8%, respectively. The tech-dominated Nasdaq Composite Index fell 0.9%. Jerome Powell doubted how well the present interest rates would handle the inflationary pressures the US central bank faced to meet its 2% inflation objective.
US Stock Market:
Treasury rates rose, and specific international markets fell following Federal Reserve Chair Jerome Powell’s recent remarks about the status of the US economy. In the US, the S&P Index fell by 0.8% and the Dow Jones Average fell by 0.7%. In reaction to Jerome Powell’s comments, the tech-heavy Nasdaq Composite Index fell 0.9%.
Jerome Powell doubted how well the present interest rates would handle the inflationary pressures the US central bank faced to meet its 2% inflation objective.
Powell emphasized the obstacles in the fight for price stability while speaking at a conference in Washington, saying that “we have a long way to go.” According to AFP, he made an apparent change in tone from his earlier remarks when he alluded to the necessity of more disinflation brought on by an economic downturn.
There was optimism that the Federal Reserve was finished raising interest rates after they decided to hold them at their current 22-year high for a second straight meeting. Jerome Powell’s warnings, however, indicate that the central bank is prepared to raise interest rates much more if needed to counteract growing inflation.
Other asset groups had erratic moves, while equities markets saw a decline. Although there was a rise in oil prices on Thursday, the losses incurred during the preceding two days were not much affected. Reduced demand expectations and waning concerns that the Israel-Hamas conflict may worsen and spark a broader catastrophe in the oil-rich Middle East were blamed for the earlier declines.
Bitcoin experienced a rise in value as cryptocurrencies continued to draw investors looking for alternative assets in uncertain economic times. At the same time, the dollar stayed steady, indicating market nervousness following Powell’s remarks.
