Powell Sees Inflation Easing While Focus Turns To ECB And BOE

As expected, the Federal Reserve raised key interest rates by 25 basis points, while Fed Chairman Powell said in his press conference that he sees the beginning of the process of slowing inflation, but added that the central bank’s decisions will continue will become meeting-by-meeting basis. He also added that he sees progress in slowing inflation, but also said the Fed may continue to raise interest rates. , The US dollar continued to fall after Powell’s comments on Wednesday, touching near nine-month lows against other major currencies. Speaking at a press conference after the Fed said it had raised interest rates by a widely expected 25 basis points, Powell said he was not entirely sure where the central bank would end its borrowing costs as it continued its efforts. to cool inflation. “The market is at a time when (Powell) is seeing a decline in inflation, and he seems pretty confident that will continue,” said Edward Moya, senior analyst at OANDA in New York. “They have two more inflation reports coming at the March meeting, and if we see further easing of price pressures, they may stay below their dot pattern and only need one more rate hike,” Moya continued. “It’s good news for risk assets, good news for the euro, and it sends the dollar to the lowest level we’ve seen in months.” Many economists saw a less aggressive outlook than Federal Reserve policymakers had previously suggested, as higher interest rates could slow economic growth, tip the US economy into recession and force the Fed to change policy where they start cutting. rate The dollar index was down near 101.03, one of its lowest since April, while the euro was near 1.10020 against the US dollar, also near its highest since April . The British pound gained about 0.6% against the US dollar to close at 1.23910. . The prospect of a less aggressive central bank weighed on the dollar, but it was more burdened by support for the euro and the British pound, and the European Central Bank and the Bank of England expected to increase on Thursday. 50 bps and that could potentially mean additional rates. In US markets, SandP 500 futures rose overnight after the Fed decision, while Nasdaq 100 futures traded higher, supported by a better-than-expected earnings report from Meta Platforms. Meta’s stock price rose more than 19% in the after-hours session after the earnings report, while also announcing a $ 0 billion share buyback. On Thursday, focus on earnings from Apple, Alphabet, Amazon and Starbucks, while many economists expect NFP on Friday. In the oil market, prices recovered some of Wednesday’s losses in Thursday’s early session as the dollar weakened and OPEC’s decision to keep production unchanged eased concerns about rising supply. Brent crude futures added 65 cents to near $83. 9 a barrel by 0353, while US West Texas Intermediate (WTI) crude futures were also up around 71 cents at $77.12 a barrel. Both oil futures lost more than 3% after a larger-than-expected US crude stockpiles report.

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