Markets jolted as hawkish Fed announces upcoming US rate hike – business live | Business




US Federal Reserve Chairman Jerome Powell addressing a news conference last night Photograph: US Federal Reserve/Reuters

Hello and welcome to our ongoing coverage of the global economy, financial markets, eurozone and business.

Global markets are rocked today after the US central bank signaled it was ready to raise interest rates as it battled the highest rate of inflation in forty years.

Federal Reserve Chairman Jerome Powell struck a particularly hawkish tone at last night’s press conference, saying officials were willing to drum up interest in March and were not ruling out an aggressive round of hikes. interest rates at future meetings.

Yohay Elam
(@forexcrunch)

– Powell’s main hawkish points: 1) Not ruling out a rate hike at every meeting 2) Plenty of leeway to raise rates without hurting jobs 3) Wages are rising at the fastest pace in 1 years /2


January 26, 2022

Yohay Elam
(@forexcrunch)

4) Saying a long expansion means price stability, which is different from focusing on employment 5) “We haven’t made any decisions on bullish increases – basically we’re not ruling out a double rate increase dose of 50 basis points 2/2


January 26, 2022

Powell told reporters there was “quite a lot of room to raise interest rates without threatening the labor market” as he also prepares to trim his balance sheet which has ballooned to $9 trillion.

He also warned that inflation remains above the Fed’s long-term target and that supply chain issues could be more persistent than previously thought.

Investors are bracing for a sharp hike in interest rates this year, after Powell hinted the Fed could tighten policy faster than in its last hike cycle as growth and inflation are higher than before. ‘in 2015.

As Powell said:


We will have to be, as I mentioned, nimble about this. The economy is much different this time.

Jonathan Ferro
(@FerroTV)

“The hawkish risks we had highlighted emerged during the press conference…Rather than being deterred by financial market volatility, Powell described the tightening of financial conditions as an expected outcome of the more Fed warmonger”

City


January 26, 2022

Jonathan Ferro
(@FerroTV)

“He also suggested that if he were to redo his base PCE forecast for the end of this year, he would be inclined to add three tenths. Bottom line, the risks are skewed to more than 4 ups this year, as we reported it”

BofA


January 26, 2022

Powell’s hawkish comments shattered Wall Street’s rally on Wednesday and sent stocks in Asia-Pacific markets to their lowest level in 15 months.

“The Fed has gone from being the market’s best friend to a possible enemy,” said Kyle Rodda, an analyst at online trading platform IG in Sydney, adding that the Fed was determined to “bring inflation down rather than protecting asset prices”.

from Japan Nikkei led the way, plunging more than 3% as the Kospi in Seoul ended up in equally negative territory. The market in Hong Kong was down 2.5% and Sydney lost almost 2%.

MSCI a large measure of regional markets outside of Japan fell more than 2% to their lowest level since November 2020.

European stock markets are set to fall sharply as January’s market turmoil continues.

Pedro Gallego Gil
(@_SirPeter)

European opening calls:#FTSE 7352 -1.58%#DAX 15127 -2.15%#CAC 6830 -2.18%#AEX 734 -2.44%#MIB 26072 -2.06%#IBEX 8417 -2.36%#OMX 2236 -2.21%#SMI 11910 -1.55%#STOXX 4060 -2.50%


January 27, 2022

Also coming today

We find out how the US economy fared in the last three months of 2021, when the first GDP estimate for October-December is released.

Economists predict growth picked up to an annualized 5.5% from 2.3% in the third quarter before the Omicron variant hit at the end of the year

In the UK, car production fell to its lowest level since 1956 as rising energy costs and a shortage of computer chips hurt the recovery.

Agenda

  • 7am GMT: GfK survey on German consumer confidence
  • 11am GMT: CBI UK retail survey
  • 13:30 GMT: US Q4 GDP report
  • 1:30 p.m .: Weekly unemployment figures in the United States
  • 15:00 GMT: US home sales pending

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