The US Federal Reserve delivered their fourth straight 75 basis-point interest rate increase while also signalling their aggressive campaign to curtail inflation could be approaching its final phase. The unanimous decision lifts the target for the benchmark federal funds rate to a range of 3.75% to 4%, its highest level since 2008.
2023 could be good year for equities: OmniScience Capital
“Mr Market was expecting the 0.75 percentage rate hike from the U.S. Fed which has shown determination to stay the course until the job's done. It looks like H1 2023 is going to see a level of 5-5.5% Fed funds rate and a real GDP of 0%-1%, but a nominal GDP of 6%-7% or so. This should not be confused with a bear market. Most likely by H1 2023 the markets will start looking beyond to the pause in the rate hikes and the eventual loosening to bring the Fed rate back to the neutral 2.25%-2.5%. Thus, 2023 could be quite bullish as soon as core PCE inflation rates look like they are moving below the 5 year treasury yields," said Vikas Gupta, CEO and Investment Strategist, OmniScience Capital.
Outperformance of Indian stock markets to continue: Sanjiv Bhasin
IIFL Securities Director Sanjiv Bhasin expects the outperformance of Indian stock markets to continue. “Federal Reserve has lost credibility. They are speaking in different tones. Some members being dovish while the chairman being hawkish. FOMO (fear of missing out) is huge for foreign investors who are now buyers since last week. Retail flows are calling the shots. Expect the Fed news to get discounted by end of the day. New highs on the cards in November," Mr Bhasin said.
Russian rouble slides past 62 vs dollar to over 2-week low
The Russian rouble hit a more than two-week low against the dollar in early trade on Thursday, as global oil prices slipped after the Federal Reserve raised interest rates and expectations of more tightening set the stage for further firming of the US currency.
Banks, miners drag Australian shares lower as Fed sticks to hawkish tone
Australian shares closed lower on Thursday, after a hefty rate hike and hawkish messaging from the U.S. Federal Reserve startled global markets, with rate-sensitive banking stocks and domestic miners leading losses.
Gold subdued as Fed's Powell sours pivot hopes
Gold prices were flat on Thursday, following a volatile session, as hopes of a pivot dissipated after U.S. Federal Reserve Chair Jerome Powell signalled further rise in borrowing costs.
Spot gold was flat at $1,635.42 per ounce, as of 0637 GMT, after falling 0.8% on Wednesday.
Weary investors see little respite to Fed hike gloom
Investors trying to navigate this year's relentless interest rate rises have more reasons to play it safe, after a pessimistic message from the U.S. Federal Reserve clouded the outlook for asset prices.
Hong Kong raises rates after Fed, flags more increases in borrowing costs
The Hong Kong Monetary Authority (HKMA) on Thursday raised its base rate charged via the overnight discount window by 75 basis points to 4.25%, and said households should brace for a period of higher commercial rates and carefully manage financial risks.
Rupee falls 8 paise to 82.88 against US dollar
The rupee depreciated 8 paise to 82.88 against the US dollar in morning trade on Thursday after the US Federal Reserve raised interest rates and maintained a hawkish stance.
At the interbank foreign exchange, the domestic unit opened at 82.87 against the dollar, then lost further ground to quote at 82.88, registering a loss of 8 paise over its previous close.
What Fed's new game plan means for Indian stock markets
Indian stock markets fell today, tracking a slide in Asian peers after US Federal Reserve chairman Jerome Powell overnight said that the US central bank would raise interest rates more than previously anticipated, sapping the risk appetite. The Fed raised rates 75 basis points for the fourth time in a row, bringing the top of its target range to 4%, the highest level since 2008.
Copper eases on prolonged US policy tightening worries
Copper prices fell on Thursday as risk sentiment soured and demand outlook for metals dimmed due to prospects of protracted policy tightening by the US Federal Reserve.
Rupee likely to weaken after Fed's Powell hints at higher peak rate
The Indian rupee is tipped to decline against the dollar on Thursday, after U.S. Federal Reserve Chair Jerome Powell noted that interest rate hikes might have to rise more than what was previously expected.
The rupee is expected to open at around 82.85-82.90 to the dollar, compared with 82.7800 in the previous session.
Hawkish Fed seen as bad news for Asia stock and currency bulls
A more hawkish-than-expected Jerome Powell sent US stocks spiraling lower Wednesday and analysts expect more of the same for Asia Thursday. Higher-for-longer US interest rates are likely to impact growth in the region, weigh on stocks and put further pressure on currencies thanks to a strengthening dollar.
Asian shares tumble as Powell primes further hikes
Asian stocks slumped after Jerome Powell said the Federal Reserve would raise interest rates more than previously anticipated, sapping risk appetite and sending global equities to their worst day in nearly a month.
Sharp Yen swing has traders on watch for post-Fed Japan reaction
A sharp reversal in the yen in the wake of a hawkish Federal Reserve had currency traders on edge Thursday, with Japan on holiday and the threat of intervention still looming.
Oil drops as more rate hikes overshadow tightening fuel market
Oil fell after Federal Reserve Chair Jerome Powell said interest rates will go higher than earlier projected, overshadowing tightening supply.
Fed is still enemy No. 1 for Wall Street traders eyeing bonds
Wall Street money managers looking to pile back into Treasuries after months of losses will have to contend with a Federal Reserve that stands ready to raise the stakes every step of the way.
Hong Kong central bank raises interest rate after Fed move
The Hong Kong Monetary Authority (HKMA) on Thursday raised its base rate charged through the overnight discount window by 75 basis points to 4.25%, hours after the U.S. Federal Reserve delivered a rate hike of the same margin.
Powell says will take time for rate hikes to bring inflation down
Fed Chair Powell said that it will take time for the central bank rate hikes to bring inflation down, and that will necessarily lead to slower US growth. While the housing market has slowed, "It will take time... for the full effects of monetary restraint to be realized, especially on inflation," he said, adding that the effort is "likely to require below-trend growth."
Dollar slips after Fed seen tilting dovish following statement
The dollar slid broadly against major currencies after the Fed signalled that future interest rate increases to battle high inflation could be made in smaller increments.
Powell says 'very premature' to consider pausing rate hikes
- It is premature to consider pausing
- If we don't get the inflation down, it will become entrenched
- We will update our estimate of where rates will need to go in December
Fed to begin discussing slower rate hikes in Dec
Fed to begin discussing slower rate hikes in December: Jerome Powell
Powell on when to moderate the pace of increases
Powell says: "The question of when to moderate the pace of increases is now much less important than the question of how high to raise rates and how long to keep monetary policy restrictive."
Jerome Powell says
“The ultimate level of rates will be higher than previously expected"
Powell elaborates more
- Demand far outnumbers supply
- The labour market remains extremely constrained
- US job openings remain plentiful
- The slower output growth is also putting pressure on business fixed investment
Fed's Powell
“We are firmly committed to lowering inflation and we have resolve," says Fed Chair Jerome Powell.
Wall Street turns higher after Fed hints at smaller hikes
The Dow Jones Industrial Average rose 220.81 points, or 0.68%, to 32,874.01, the S&P 500 gained 13.5 points, or 0.35%, to 3,869.6 and the Nasdaq Composite added 12.89 points, or 0.12%, to 10,903.73.
Chair Jerome Powell to speak at press conference soon
US Federal Reserve Chair Jerome Powell will have a chance to elaborate on the outlook for future meetings at his press conference at 12:00 am (IST) in Washington.
White House on Fed rate hike
White House press secretary Karine Jean-Pierre said the Fed's latest move to raise its benchmark interest rate will help to bring down inflation, and a rise in mortgage rates should cool inflation in the housing market.
Key takeaways from Fed decision
- Fed hikes the federal funds target rate by 75 basis points for a fourth straight meeting to 3.75%-4% range
- Officials anticipate “ongoing increases" in borrowing costs but adds a qualifier saying they're aiming for tightening that's “sufficiently restrictive" to return inflation to 2% over time
Another big change to the statement is a new line with a signal that tightening is entering the final phase: “In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments"
- The decision is unanimous
Stocks climb after Fed decision
Stocks erased losses as the Federal Reserve signaled its most-aggressive campaign since the 1980s to curb inflation could be entering its end phase, with traders now awaiting to hear more details from Chair Jerome Powell. The S&P 500 climbed.
‘Ongoing increases’ will likely be needed to…
The Fed said that “ongoing increases" will likely be needed to bring rates to a level that is “sufficiently restrictive to return inflation to 2% over time".
FOMC statement
The new language in the policy statement took note of the still-evolving impact that the Fed's rapid pace of rate hikes has set in motion, and a desire to hone in on a level for the federal funds rate "sufficiently restrictive to return inflation to 2% over time."
Fed delivers big rate hike
The Federal Reserve on Wednesday raised interest rates by three-quarters of a percentage point as it continued to battle the worst outbreak of inflation in 40 years, but signaled future increases in borrowing costs could be made in smaller steps to account for the "cumulative tightening of monetary policy" it has enacted so far.
Ex-Fed chief Greenspan sees dollar with 'tailwind' into 2023
Former Fed Chair Alan Greenspan sees a monetary “tailwind" for the dollar in the coming year even in the event that US monetary policymakers slow or halt their current interest-rate hiking campaign.
50 or 75 bps rate hike in Dec
Traders are split on the odds of a 50 bps or 75 bps rate hike in December, according to CME Group's Fedwatch tool. The Fed's interest rate decision is due soon, but focus will be on commentary from Fed Chair Jerome Powell later.
Megacap tech weighs on stocks
Stocks fell as data showed continued labor-market strength, with investors waiting to hear from Fed Chair Powell on whether it would be realistic to expect a slowdown in the pace of rate hikes going forward. The S&P 500 saw its third straight loss, while the tech-heavy Nasdaq 100 underperformed as big names like Apple and Tesla sold off. Boeing climbed after its chief’s bullish cash outlook.
Euro zone govt bond yields tread water ahead of Fed
Euro zone government bond yields drifted higher, after US employment data tempered expectations for the central bank to signal it may not raise interest rates as quickly.
Stocks slide before expected Fed hike
European and US stock markets slid today, with investors on edge before another widely expected jumbo interest rate hike from the US Federal Reserve. On Wall Street, the Dow was down 0.4% in midday trading, while the broader S&P 500 slid 0.8% and the tech-heavy Nasdaq slumped 1.3%.
Broader market likely to remain somewhat subdued
The broader market is likely to remain somewhat subdued ahead of the Federal Reserve's post-meeting announcement at 11:30 pm today, when the central bank is expected to deliver its fourth, 75 basis points interest rate increase.
Another mega interest rate hike is coming
The US should prepare their finances for even higher interest rates this year as the Fed continues its fight against inflation. Investors were also cautious ahead of the Federal Reserve's meeting on interest rates.
US firms add 239,000 jobs, ADP says
Hiring at US companies rose in October by more than forecast, mainly reflecting a surge in leisure and hospitality and underscoring resilient labor demand despite the US Fed's efforts to cool the economy. Private payrolls rose 239,000 last month after a revised 192,000 gain in September, according to data from ADP Research Institute in collaboration with Stanford Digital Economy Lab.
S&P 500 sees narrowest swings this year before Fed
A sense of caution was reflected in the S&P 500’s swings Wednesday – with the gauge currently on track for its narrowest range this year. Of course, things might change depending on the market reaction to the Federal Reserve's decision.
8 of the same 10 central banks raised rates
By comparison, eight of the same 10 central banks raised rates by a combined total of 550 bps in September, the fastest pace of tightening in at least two decades. The latest moves have brought total rate hikes in 2022 from G10 central banks to 2,050 bps.
Barclays and HSBC strategists warn
The stock market’s recent optimism looks misplaced with the rally too dependent on expectations the US Federal Reserve will drop hints that rate hikes will slow, according to strategists at Barclays Plc and HSBC Holdings Plc, who urge caution.
Stocks fall, dollar eases broadly
Global stock indexes fell and the dollar was slightly lower against other major currencies. A Reuters poll found currency strategists thought the dollar's retreat was temporary.
FOMC statement
The Federal Reserve is due to release its policy statement at 2 pm EDT (11:30 pm IST), but traders' focus will be on commentary from Fed Chair Jerome Powell later.
Gold to rebound slightly next year as Fed tightening cycle ends
Gold prices will average $1,712.50 an ounce next year, rising from current levels. Gold has tumbled from above $2,000 an ounce in March to around $1,650 as the Fed and other central banks raised interest rates rapidly to tackle inflation.
Oil avoids big moves
Oil remained near $88 a barrel, avoiding any large moves even as an industry report pointed to another sizable decline in US crude inventories. West Texas Intermediate futures were little changed after switching between gains and losses, with prices stuck in a $12 band over the last month. US crude stockpiles fell 3.12 million barrels last week, as per an Energy Information Administration report.
Dollar eases across the board
The dollar slipped broadly today as investors awaited a Federal Reserve policy decision amid speculation it might signal a slowdown in the pace of future rate hikes. The euro was 0.11% higher against the dollar at $0.9885, while against the Japanese yen, the dollar fell 0.8% to 147.03 yen.
US yields little changed before Fed statement
Treasury yields were little changed today hours before the US Fed is widely expected to raise its policy interest rate by 75 basis points amid market speculation the central bank may signal an easing of monetary tightening. The yield on benchmark 10-year Treasury notes was above 4%, while two-year yields, which typically moves in step with interest rate expectations, was above 4.5%.
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