Heavy losses in euro markets thanks to Powell – German DAX down 300 points

German macros turned the euro markets into negative territory and Powell’s “hawkishness” at the Jackson Hole economic symposium sent them deeper into the “red”.

In his long-awaited speech, the president of the central Federal reiterated his commitment to contain inflation, warning that he expects the US central bank to continue raising interest rates in a way that will put “strain” on the country’s economy.

Powell stressed that the Fed will continue the fight against inflation “until the job is done” and to that end “will use its tools vigorously.”

Even with a run of four consecutive rate hikes totaling 2.25 percentage points, Powell said this is “not a point to stop” even though rates are likely around an area that is considered neither supportive nor constraining to growth .

“We are deliberately moving our policy to a level that will be restrictive enough to return inflation to 2 percent,” Powell said. Looking ahead, the Fed chief added that “restoring price stability will likely require maintaining restrictive policy for some time. The historical record strongly cautions against premature policy easing.”

The central banker’s remarks came amid signs that inflation may have peaked but shows no strong signs of abating. After all, analysts estimated that the Fed chairman would adopt an aggressive stance in his speech, confirming that the bank’s main goal is to bring inflation to the 2% target, regardless of the effects on the economy.

Back in Europe, the macroeconomic data announced on Friday by Germany they showed that consumer sentiment is headed for a new record low for the third month in a row in September amid the energy price rally. The GfK institute announced that the consumer sentiment index is expected to stand at -36.5 in September, continuing a streak of historic lows that began in July.

In this climate, the pan-European index Stoxx 600 fell 1.68% to 426 units, with the retail trade and travel/leisure sectors posting the heaviest losses of 3.5% and 3.4% respectively. In weekthe Stoxx 600 slipped 2.6%.

In the individual boards, the German DAX plunged 2.26% to 12,971.47 units, the French CAC 40 and the British one fell by 1.68% to 6,274.26 units FTSE 100 shows losses of 0.7% at 7,427.31 points.

In the periphery the Italian FTSE MIB recorded an even worse performance, losing 2.49% to 21,895.25 points, while the Spanish IBEX 35 slipped 1.51% to 8,063.90.

In the individual shares, Just Eat fell to the bottom of the Stoxx 600, down 7.8%. Close behind, Delivery Hero and Hellofresh which lost 7.2% each.