The markets’ enthusiasm for the Federal Reserve’s statements did not last long, as yesterday, after raising interest rates by 0.5%, he ruled out the next rise expected in June, can be 0.75% As suggested by some analysts. Yesterday the S&P 500 closed on Wall Street at +3% but the gains from today’s session were canceled, in red both in the US and Europe. Eurostoxx 600 Index is down 0.8%, piazza Afari closed down 0.6% After the first upward half of the session. performance BTPs for ten years exceeded 3%. The rate hike decided by the US central bank yesterday has raised the cost of money in 1%. It’s also the biggest increase in the past 22 years. At the same time, the Federal Reserve announced a new reduction in the volume of securities purchases. Today may move too Bank of England I decided A new rise in interest rates, raising them from 0.75% to 1%.. The decision was expected and was interpreted by the UK’s central institution as a measure to counteract the record rise in UK inflation. The central bank warns that this year British inflation could reach 10%.
price increase It was expected by analysts and markets It is another step in the Fed’s monetary tightening strategy to address it economic inflation In the United States it reaches 8.5%. Rates were raised by 0.25% last March. Raising prices is one way to make money more expensive. Getting a loan becomes more expensive Money in circulation decreases while the quantity of goods in the market decreases. This results in a file Downward pressure on consumer prices But it has the side effect of slowing economic growth. In the first quarter of 2022, Gross Domestic Production The United States suffered from a shrinking 1.4%an unexpected decline that may prompt the Federal Reserve to ease its moves.
Yesterday, the Fed Chairman said: “I want to speak directly to the Americans: inflation is very high and it is necessary to bring it down” to ensure a recovery that benefits everyone. Jerome Powell, at his first press conference he attended nearly two years ago. The Fed “has the tools to bring down inflation and is moving quickly to bring it down.” He said more increases of half a percentage point are “on the table” for upcoming meetings, but the central bank Don’t “actively consider” the possibility of a 75-point rate hike base in june. The US economy is doing well: “We expect strong growth this year” and nothing indicates that we are “close to or vulnerable to a recession,” Powell explained, explaining that there is a good chance of restoring price stability without a recession. However, he admitted, the tools at the Fed’s disposal are not precise.
US trade deficit above 100 billion – The Fed’s restrictive policy is also behind the race On the dollar in recent weeks and higher yields of US government bonds. Ten years pay for mefor 3%. Yesterday, the US trade deficit data (the difference between the value of exports and imports) was released, which rose in March by 22.3% to $109.8 billion. Bigger red than ever and for the first time above me 100 billion. A number worse than analysts’ expectations. Imports increased by 10.3% to 351.52 billionWhile exports increased by 5.6% a 241.7 billion.