The Fed’s most aggressive rhetoric is bringing down the Wall

LAST UPDATE: 19:11

Key Wall Street indexes are trading negatively on Wednesday in the wake of the aggressive statements by Federal Reserve Chairman Jerome Powell and other central bank officials about the need to tackle the inflation rally that seems to be paving the way for a greater increase in US interest rates in the future.

The president of the Federal Reserve Bank of St. Louis, James Bullard and San Francisco Fed Chairman Mary Daly backed the Fed chief Jerome Powell earlier in the week, raising the possibility of higher interest rates by 50 basis points in the future. , if needed to bring inflation under control.

The central bank last week made its first rate hike since 2018, taking the first step to tackling the highest inflation in 40 years. The increase was by 25 bp. as the market had discounted.

Expectations of a more aggressive tightening of monetary policy in the coming months led to a rally in bond yields. The performance in the 10 years of the USA is declining slightly today after yesterday’s rally to the highest level since mid-2019.

Indicators – Statistics

On the board, the Dow Jones lost 337.94 points or -0.97% at 34,469.52 points, while the broader S&P 500 fell 28.11 points or -0.62% to 4,483.50 points. The tech Nasdaq is moving 39.03 points or -0.28% lower at 14,069.79 points, having reduced its initially higher losses.

Of the 30 stocks that make up the Dow Jones industrial average, 10 closed with a positive sign and 20 with a negative. The biggest increase is recorded by Merck with gains of $ 0.98 or 1.24% at $ 80.28, followed by Chevron at $ 166.03 with an increase of 1.18% and Amgen with gains of 0.54 % at $ 237.76

On the other hand, the three stocks with the biggest losses are Salesforce.com (-3.93%), Home Depot (-2.77%) and Boeing (-2.21%).

At the same time, investment attention remains focused on developments in Ukraine shortly before the Summit of European Union Leaders on the Russian military offensive, which will be attended by US President Joe Biden.

The Summit of Leaders is expected to result in the imposition of new sanctions against Russia, although analysts believe that a ban on energy imports from Russia is not very likely, as the US and the UK have already done.

Speaking to reporters as he left the White House for Brussels, the US president warned of the danger of Russia using chemical weapons to achieve its goals. “I think it’s a real threat,” Biden said when asked about the possibility of Russia using chemical weapons in Ukraine.

Source: Capital

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