The Dow Jones Industrial Average fell more than 100 points amid concerns the Federal Reserve is accelerating interest rate hikes to curb inflation.
As of 11:35 p.m. Thai time, the Dow Jones Industrial Average was 32,733.79 points, down 122.67 points or 0.37%.
Trading was pressured today. after revealing higher than expected private employment numbers While the number of job openings decreased less than expected. This will be a factor supporting the Fed’s interest rate hike.
Markets eye US nonfarm payrolls on Friday. While analysts expected The number of jobs increased by only 200,000 in February. After rising more than expected to 517,000 jobs in January.
Fed Chairman Jerome Powell delivered his semiannual speech on monetary policy and economic conditions to Congress for the second day. After addressing the Senate Banking Committee yesterday
Mr. Powell reiterated today that The Fed has yet to decide on the size of the rate hike at its meeting this month. The Fed will take into account information received about the labor market and inflation.
“We haven’t made any decisions about the meeting in March. and most importantly The Fed has no predetermined approach. The Fed’s decisions will be determined by the input. and changing trends,” Powell said.
In addition, Mr Powell stated that The non-farm payrolls figures for February, to be released on Friday, are important data. The Consumer Price Index (CPI) and Producer Price Index (PPI) will be released next week. Before the Fed will hold a monetary policy meeting on March 21-22.
Mr Powell said yesterday that The Fed may raise interest rates to higher levels than Fed officials previously expected. Because the US economy is still strong.
“The latest economic data is stronger than expected. This indicates that the Fed’s final interest rate will be higher than expected. And if all the data suggests the Fed should tighten monetary policy faster We will increase the speed of raising interest rates.”
“Even though inflation has slowed down After reaching the peak last year But the process of bringing inflation down to the 2% target is still a long way off. And it’s not smooth,” Mr Powell said. He added that the Fed’s mission to fight inflation is not yet over. And the Fed needs to tighten monetary policy for a while.
Investors expect the Fed to raise interest rates by 0.50% this month and the Fed to raise interest rates to a high of 5.50-5.75% in June, and the Fed will not cut interest rates this year. After Mr. Powell’s statement yesterday
The latest CME Group FedWatch Tool indicates investors are 72.0% weighing on the Fed raising interest rates by 0.50% to a range of 5.00-5.25% at its March 21-22 meeting, and 28.0% weighing on the Fed. will increase the interest rate by 0.25%
Steven Blitz, chief economist at TS Lombard, said the Fed will not end its rate-raising cycle until the US economy slips into recession.
“The Fed will not get out of that cycle. until Mr. Jerome Powell will put the US economy into a recession. and until the unemployment rate rises which at this point So the Fed will stop raising interest rates.”
“The US economy will definitely recession. And the Fed will hold pressure until the unemployment rate hits at least 4.5%. And I expect it could go as high as 5.5%, while the Fed could raise interest rates all the way to 6.5% before things really slow down and settle down,” Blitz told CNBC.
BlackRock, the world’s largest asset manager, expects the Fed to raise interest rates to a record high of 6 percent after Fed Chairman Jerome Powell signaled a more aggressive hike. the Fed had expected to make inflation fall to the target set by the Fed “We think there is a chance the Fed will raise interest rates to 6% and keep them at that level for some time to slow down the economy. and to bring inflation closer to 2%,” BlackRock Chief Investment Officer Rick Ryder said in the report. “The economy is more resilient than expected. This is because it is not as sensitive to interest rates as it was in the past decade. And that flexibility has made the Fed’s resolution more complicated.” “The US economy is like polyurethane. This is a substance that is highly flexible and adaptable. But it is durable and strong,” the report said.
