Mixed marks on the Wall, with a look at Powell’s deposition in Congress

Concerns over the recession hit stock markets on Wednesday, with Wall Street indexes back under pressure as investors turned their attention to the Federal Reserve chief Jerome Powell’s statement to the Finance Committee. Affairs of Congress.

In particular, on the board, the Dow Jones industrial average lost 141 points or 0.46% and moved to 30,389.15 points, while the broader S&P 500 fell 0.29% to 3,735.88 points. Despite the falling start, it strengthened by 0.12% to 11,082.87 points, and all three indices started trading with a fall of more than 1%.

Yesterday, after three weeks of losses, the “dip” of the S&P 500 in bear market last Monday and the three-day break that followed in the US market, the Wall indices reacted, with the Dow Jones adding more than 640 points or 2, 2% and the S&P 500 and Nasdaq to be strengthened by 2.5% each.

However, the rebound proved to be short-lived, as the head of the Fed today confirmed, on the first day of his submission to the Senate Finance Committee, the intention of the Federal Reserve to continue its “attack” on inflation, reiterating its “unwavering commitment”. ”Policy makers to reduce inflation from the high of 40 years it has climbed.

“It is crucial that we reduce inflation in order to have a prolonged period of strong labor market conditions for the benefit of all citizens,” the US Federal Reserve said in a statement to the Senate.

He said inflation remained well above the Fed’s official 2% target, although there was some evidence that the non-food price index and energy costs, two categories that change significantly, may have peaked or even has declined somewhat in the last month, according to Reuters.

He added, however, that so far inflation has surprised, while he did not rule out the possibility of other surprises in terms of price increases, justifying the aggressive policy pursued by the Fed.

“We believe that the forthcoming interest rate hikes will be appropriate; the pace of these changes will continue to depend on the incoming data and the evolving economic outlook,” Powell said, adding that “we will make our decisions from meeting to meeting and continue to communicate our reasoning as clearly as possible “.

At the same time, he assured that the US economy is very strong and can withstand a tighter monetary policy and consequently the interest rate hikes that will follow.

Powell’s statements, however, do not seem to allay investor concerns that a sharp rise in interest rates by the Fed to curb rampant inflation will eventually lead to a downturn in the US economy, raising risk aversion and shifting away from investing. items such as shares.