© Reuters
Investing.com – Negativity dominated the main indices of the US market at the opening, especially after the comments of the Fed’s member Bullard, which did not fall in love with the markets, which expect the Fed to retreat from the policy of aggressive monetary tightening.
dollar
The US dollar is now declining by 0.43%, to record 101.703 against a basket of foreign currencies, most notably the euro, which is trading at 1.0834 against the US dollar, up by 0.42%.
Yields are also witnessing a collective decline, as yields on 10-year Treasury bonds fell by 3.69%, to record 3.404%, while yields on two-year Treasury bonds fell to 4.0972%, down by 2.26%.
Wall Street..begins to flop and look on
At the same time, it witnessed a marginal decrease, as it lost 0.02% and scored 11093.18 points, while it recorded 33735.67 points, a decrease of 0.52%, and the list of the 500 largest companies in terms of capital is also declining by 0.38%.
It lost by 1.70%, to lose the levels of 21.5 thousand that it reached and return again below 21 thousand, to keep 21.5 thousand strong resistance for Bitcoin.
And silver..reducing gains
Gold trimmed much of its intraday gains, rising only by 0.20% now, recording 1914.00 for futures contracts and $1911.79 for spot contracts, up 0.16%. As for futures contracts, they are trading at $24.045 an ounce.
Fed member Bullard said that his interest rate forecast at the end of 2023 is to reach . Adding that he believes that inflation will occur in 2023, but not as fast as the markets expect.
Regarding the Fed’s interest rate and its current policy, Bullard commented that it has become close to the strict levels, but it has not reached there yet, considering that it must rise to 5% to be called a tight monetary policy.
And Bullard expressed his fear that inflation will rebound, considering that the Fed’s survival on the more stringent side keeps it safe from this rebound and its consequences.
Pollard indicated that the global economy is improving, as Europe has succeeded in improving its situation and reducing the chances of exposure to a strong recession, as well as China’s return to the picture with the reopening, but this improvement may stimulate inflation to rise again.
Polader commented on the US GDP during the second half of 2022, saying that it came stronger than expectations, and that the chance of reaching US economic reform and a safe landing (soft landing) increased.
Bullard said that the Fed should raise interest rates to 5% levels as soon as possible and recommended an increase of 50 points at the next meeting.
Regarding the shift in the Fed’s policy, Bullard said that this is possible only if inflation rates fall dramatically and violently, as this may push the Fed’s members to back down from their previous recommendations regarding the continuation of the tight monetary policy.
Bullard stressed the importance of the Fed maintaining the market’s confidence in it, and that this will only be achieved by adhering to a strict monetary policy that guarantees a drop in inflation.
Regarding the Fed’s budget, Bullard saw that the process of reducing the budget is going well and there is no need to review it until the second half of 2023 or after that, saying that the budget reduction may continue even after stopping raising interest rates.
