European stocks continued to weigh heavily on Thursday as concerns about the resilience of the world’s largest economies to a high and persistent inflation environment forced central banks to raise interest rates in succession.
The Federal Reserve yesterday raised interest rates the most since 1994 as it continues its quest to curb the highest inflation in four decades.
Yesterday decision of the US Federal Reserve to raise interest rates by 75 basis points to 1.5% to 1.75% – the highest since the March 2020 pandemic outbreak – confirmed analysts’ forecasts that the Fed would move even faster as price rally does not seem to be slowing down.
At the press conference after the monetary policy decisions, the Fed chairman, Jerome Powell, however, tried to appear reassuring noting that “the current increase of 75 bp is unusually large” and adding that he does not expect “similar moves of this magnitude to be common”. He noted, however, that he expects the June meeting to result in an increase of 50 to 75 points.
Today, their interest rates increased Hong Kong Monetary Authority and the Central Bank of Switzerland, while the attention of investors is now turning to the Bank of England. The central bank is expected to raise interest rates for the fifth consecutive time, despite the slowdown in growth.
On the board, the pan-European Stoxx 600 index plunged 2% to 404.73 points.
The German DAX fell 2.6% to 13,130.57 points, the French CAC 40 lost 2.05% to 5,906.73 points, while the British FTSE 100 plunged 2.1% to 7,119.02 points.
In the region, the Italian FTSE MIB loses 2.45%, while the Spanish IBEX 35 falls by 1.2%.
On Wednesday, the European Central Bank announced that it plans to intervene to combat fragmentation in the Eurozone, announcing that it has been instructed to design a new tool that will be evaluated by the Board. of the bank at one of its next meetings.