European stocks traded lower on Thursday in the wake of the US Federal Reserve’s decision yesterday to raise interest rates the most since 1994 as it continues its efforts to curb the highest inflation in four decades.
Yesterday’s decision by the US Federal Reserve to raise interest rates by 75 basis points to 1.5% to 1.75% – the highest since the outbreak of the March 2020 pandemic – confirmed analysts’ forecasts. the Fed to move even faster as the price rally does not seem to be slowing down.
However, Fed Chairman Jerome Powell was reassuring in his remarks, noting that “the current 75-degree increase is unusually large” and adding that he did 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.
Investors’ attention is now focused on the Bank of England, which is meeting today for its interest rates. The central bank is expected to raise interest rates for the fifth consecutive time, despite the slowdown in growth.
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.
On the board, the pan-European Stoxx 600 index recorded small losses of 0.4% at 411.48 points.
The German DAX lost 0.6% at 13,389.24 points, the French CAC 40 lost 0.5% at 6,002.48 points, while the British FTSE 100 fell 0.6% to 7,225.67 points.
In the periphery, the Italian FTSE MIB loses 0.45%, while the Spanish IBEX 35 falls by 0.4%.