The market reacts to the Fed’s contradictory messages

The market reacts to the Fed’s contradictory messages

The president of the Chicago Fed, Austan Goolsbeesaid she had planned three rate cuts this year, while Fed Governor Lisa Cookcalled for caution and the president of the Atlanta Fed, Raphael Bosticreiterated Friday’s comments by reducing his expectations to a cut.

While the markets wait for the next indicators of inflation of the United States, which will be published on Good Friday, the reactions show the concern that yesterday’s statements generated.

Analysts predict that the index of underlying personal consumption prices (PCE) of the United States increased by 0.3% in February, which would maintain the annual rate at 2.8%.

Global stocks were struggling to gain traction. The world index of MSCI It barely changed during the day, since Europe had a weak start and the feeling in China and Hong Kong remained fragile after Friday’s sudden drop in the yuan. The futures of S&P 500 they rose 0.3%.

The yen strengthened 0.1% on Tuesday, to 151.25 per dollar, trading near its weakest level against the greenback since 1990, even after the Bank of Japan raised interest rates for the first time in 17 years last week.

Meanwhile, the yuan, which the Chinese central bank set at a firmer level earlier in the day, also gained ground against the dollar, which fell 0.1% in the offshore market to 7.2464 yuan.

He euro was trading at $1.0850 and the pound to $1.2645, both up slightly on the day and in the middle of their recent ranges.

The price of gold It rose, meanwhile, supported by the weakness of the dollar. The spot metal was up 1% at $2,193.33 per ounce by 1040 GMT.

Gold hit an all-time high last week after U.S. monetary policymakers Federal Reserve They indicated that they still expected to reduce interest rates by three-quarters of a percentage point by the end of 2024, despite recent high inflation readings.

Source: Ambito

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