Global stocks dip after new Fed head signals quicker interest rate hikes

by | 28 Feb, 2018

New Fed Chief Jerome Powell

U.S. stock markets fell during trading yesterday after Federal Reserve Chairman Jerome Powell signaled the central bank would likely raise interest rates more than 3 times in 2018.

Powell said the U.S. economy had strengthened since the Fed’s last set of economic projections in December against a backdrop of rising inflation, which some investors have taken as a signal the Fed is going to adopt a more hawkish outlook for monetary policy this year.

The Dow Jones, S&P500 and Nasdaq finished down 1.16, 1.27 and 1.23 per cent lower respectively last night, while Asian and European markets are all lower too today (see chart).

A slowdown in factory activity in China, a key market for London-listed metals producers, was also putting pressure on London’s benchmark FTSE100 index.

Today’s action has showed just how sensitive global stocks remain to the prospects of rising inflation and higher interest rates.

 

European markets follow Wall Street lower Wednesday on the prospect of higher borrowing costs from the world’s largest economy

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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