Powell said a half percentage point interest rate hike “will be on the table” when the US central bank meets on May 3-4.
The fed funds rate futures have begun trading incorporating a third 50 basis point hike in July, considering rises of the same magnitude in May and June. The calculation represents an increase of almost 248 cumulative basis points for 2022.
“Even if the Fed makes consecutive 50 basis point hikes, it’s still at a rate that is on the low end or below the neutral rate,” said Calvin Tse, chief strategist at Americas Developed Markets.
Across the Atlantic The euro was down 0.4% at $1.0793, after European Central Bank officials sent mixed signals on the monetary policy path for the euro zone..
ECB President Christine Lagarde struck a dovish tone in saying a cut in the growth outlook for the region is possible, a day after Governor Luis de Guindos joined other officials in calling for an early end to the bank’s asset purchase plan, along with an interest rate hike, in July.
Investors are eyeing the second round of Sunday’s French presidential election between President Emmanuel Macron and far-right challenger Marine Le Pen. The latest polls suggest that Macron will win with 55% of the vote.
An eventual Le Pen victory could spark tensions with European allies and weigh on the euro, analysts said.
Source: Ambito
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