The markets were buoyed by good news on inflation, which, 12 months ahead, moderated between June and July, going from 9.1% to 8.5%. The market hopes that these data mean that the peak of price increases is behind us, and therefore the Federal Reserve (Fed, central bank) is less severe with its increases in interest rates.
The next central bank meeting on monetary policy will be on September 21. An inflation indicator will be published first.
“Investors are becoming more optimistic in terms of the Fed not being as aggressive as the market previously expected”said Peter Cardillo, chief market economist at Spartan Capital Securities.
While the monetary authorities remain firm on further tightening of monetary policy until inflationary pressures fully subside, traders see a 55.5% chance the Fed will raise rates by 50 basis points next month rather than a 75 basis point hike.
The Federal Reserve has raised its policy rate by 225 basis points since March as it struggles to cool demand without sparking a sharp rise in layoffs.
Other good news known on Friday was that consumer confidence in the US economy recovers more than expected in Augustthanks to improving prospects for inflation, according to a flash estimate from the University of Michigan released on Friday.
The index stood at 55.1 points, up 7% from July, and above the 52.1 points expected by analysts. In June, this key index had reached its historical low.
Among the values of the day, Disney it gained 3.3% after announcing strong results on Thursday. Big tech boosted the Nasdaq. Alphabetthe parent company of Google, gained 2.36%, Tesla 4.68% and Manzana 2.14%.
Source: Ambito
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