Stock Markets Gain On Powell’s Comments

In an interview, Federal Reserve Chairman Powell repeated his comments about inflation last week, saying: “The inflationary process has started. It has started in the goods sector, which is about 25 percent of the economy,” but also added that the pace is . speeding up . increases may be adequate to bring inflation down near the central bank’s 2 percent target. Powell added that this process “takes quite a bit of time and it’s not going smoothly.” “We’re probably going to have to raise rates more,” Powell added, as the Fed tries to combat rising inflation. In a much better than expected NFP last Friday, Powell added that the strong labor market “shows why we believe [disinflation] is a process that will take a long time.” “The labor market is exceptionally strong,” Powell added, noting that “good inflation has started to come down with a strong labor market.” Powell’s remarks, however, did not suggest that last Friday’s strong jobs data would change the Fed’s path to future rates, and after Fed Chairman Powell’s comments, US stock markets ended the session higher, with the Dow Jones Industrial Average was up about 265 points. . The SandP 500 gained about 1.29% and the Nasdaq gained 1.9%. The , major US indexes rose first on Powell’s comments before falling into negative territory and eventually ending the session higher. In addition to Powell’s comments, the US dollar fell in the early session on Wednesday as it tried to recoup some of its losses. The British pound was up about 0.02% against the US dollar after hitting a one-month low below 1.2000, while the euro was near 1.0730 against the dollar after settling near its lowest level since early January. Powell “didn’t necessarily say anything that was specifically new … I think we’re getting pretty used to the idea that the Fed is definitely going to rely on data now,” said Chris Weston, head of research at Pepperstone. “The market and the central bank are now in a position where they are just looking at the data, so now we are less sensitive to the Fed officials and much more sensitive to the data.” . The US dollar index, which measures the dollar’s value against other major currencies, was near 103.31 after losing about 0.3% in the previous session. The US dollar found support after Friday’s strong non-farm payrolls data and was near a one-month high of 103.96 on Tuesday, as many market participants reassessed the possibility of a bigger-than-expected Federal Reserve.In the oil market, however, prices remain largely unchanged during the early session of Wednesday, although the loss of the dollar tends to be cheaper for owners of other currencies. , Brent crude futures were near $83.86 a barrel at 07 0 GMT after rising 3.3 percent in Tuesday’s session, while U.S. West Texas Intermediate (WTI) crude futures were up about 31 cents near $77. 5, the previous session’s .1 percentage Oil benchmarks are expected to remain supported after slightly less cheerful interest rate comments from Federal Reserve Chairman Jerome Powell, while the latest data showed a decline in US crude inventories.According to IG analysts, improved risk sentiment following comments from Federal Reserve Chairman Jerome Powell and a weaker US dollar appear to be pushing oil prices higher as yields have been weak since late January. Yes, Jun Rong. “The caveat is that the sudden weakening reaction of the US dollar was more measured than in the past,” added Yeap, saying that the recovery of the dollar could still weigh on oil prices.

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