Wall Street anticipates falls of 0.6% this Friday, after Thursday’s sales, in reaction to comments from Jerome Powell president of the Federal Reserve (Fed), on monetary policy. Powell indicated that “the economy shows no signs that we should rush to reduce interest rates,” causing caution in markets while awaiting new key data.
Speaking in Dallas, Powell stressed that the US economic strength allows the Fed to take a cautious approach to interest rate decisions. He assured that the cooling of the labor market has alleviated inflationary pressures, which, together with the strength of the economy, balances the risks to employment and inflation objectives.
Analysts highlight that Powell’s explicit recognition of this situation confirms the likelihood that the Fed will reduce rates more gradually than markets had anticipated due to the inflationary policies implemented under the Trump administration.
Wall Street and Powell’s aggressive tone
Powell’s more hawkish tone has tempered expectations for rate cuts, and the probability that the Fed will not cut rates in December has risen from 17% to 40%. Although some analysts still think there will be a cut at that meeting, they believe future moves will be softer. Bankinter agrees with this vision and considers that any future decision will be reviewed in light of the new post-electoral context in the US.
Following Powell’s remarks, investors will be watching for interventions from other Fed members, such as Susan M. Collins and John C. Williams, for more clues on the future direction of monetary policy.
This Friday’s economic calendar includes retail sales for October, which are expected to increase 0.3%, compared to 0.4% in September.
In terms of markets, the New York indices are on track to close a week of losses, with the Nasdaq leading the decline with 0.9%, while the S&P 500 and the Dow Jones are down 0.8% and 0 .5%, respectively. Among notable companies, Domino’s Pizza rises 8% in pre-market on news of a new stake from Berkshire Hathaway, while Applied Materials loses 6% due to a weaker-than-expected revenue forecast.
In other markets, West Texas oil fell 1.3% ($67.79), Brent fell 1.32% ($71.61), the euro rose 0.33% ($1.0564) and the ounce gold loses 0.1% ($2,572). For its part, the yield on the 10-year US bond rises to 4.43%, while bitcoin rises 1.06% ($88,993).
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
