Reporters reported that The Dow Jones Industrial Average rose more than 100 points on Aug. 12 as investors eased concerns about the Federal Reserve’s accelerating interest rate hikes. The Dow Jones Industrial Average is 33,435.00, plus 131.00, or 0.39%.
while stocks rose in all segments Except for the energy sector, which fell following today’s plunge in oil prices. By trading in the market is supported. The Consumer Price Index (CPI) and the Producer Price Index (PPI) both indicate that US inflation has passed its peak. This will reduce the pressure on the Fed to accelerate interest rate hikes.
Investors cut expectations about the Fed’s interest rate hike by 0.75% at its monetary policy meeting in September. and raised expectations for a 0.50% interest rate hike after the US released CPI and PPI figures.
The latest CME Group’s FedWatch Tool shows investors weighed 63.5 percent that the Fed would raise interest rates by 0.50% to 2.75-3.00% at its Sept. 20-21 meeting and weighted only 36.5% at the Fed. will raise interest rates by 0.75%
Investors previously weighed 68.5 percent that the Fed would raise interest rates by 0.75% to 3.00-3.25 percent at its meeting on September 20-21 and weighted only 31.5% that the Fed would raise interest rates by 0.50. %
The University of Michigan will release the US Consumer Confidence Index today. While investors will keep an eye on consumer inflation expectations. This will be a key factor for the Fed in monetary policy decisions.
In the survey in July Consumers expect inflation to hit 5.2 percent over the next year, below the 5.3 percent survey polled in June. and is the lowest level since Feb.
Over the next five years, consumers expect inflation to hit 2.8 percent, well below the 3.1 percent survey polled in June. and is the lowest level in a year.
Fed Chairman Jerome Powell made it clear after the Fed’s June 15 monetary policy meeting that consumer inflation expectations in the University of Michigan Consumer Confidence Survey showed that “there’s no such thing as a negative factor.” It was revealed on June 10 that it was the main reason the Fed shifted its decision towards a 0.75% rate hike at its meeting on June 15, although the Fed expected a rate hike of only 0.50%. Just 1 week before
A poll by the University of Michigan on June 10 showed consumers expect inflation to hit 5.4 percent next year, higher than the 4.2 percent seen in the same period last year. Inflation is expected to hit 3.3 percent in the next five years, higher than the 2.8 percent surveyed in the same period last year.
Investors will also be keeping an eye on the Fed’s annual meeting in Jackson Hole, Wyoming, this month for signs of interest rate trends. meeting in Jackson This year’s hole will take place Aug. 25-27 with the theme “Reassessing Constraints on the Economy and Policy.”
The meeting in Jackson Hole is a meeting that has received a lot of attention. by central bank governors, finance ministers, academics and financial experts from countries around the world will travel to attend the meeting The highlight will be at the then-Fed chair’s speech expressing his vision of the Fed’s monetary policy. and the US economic outlook
At this year’s Jackson Hole meeting, Powell is expected to signal the direction of US interest rates. After inflation began to slow down in July.
In an earlier statement to Congress Mr Powell said The Fed is committed ‘Unconditional’ in price stabilization This indicates that the Fed is ready to take on the risks that may arise. so that the economy can avoid the dire situation of uncontrollable inflation causing long-term damage.
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