US stocks rise despite Powell’s warning against continuing to raise interest rates
US stocks rose at the end of the week’s trading, despite Jerome Powell, Chairman of the US Federal Reserve (the central bank), hinting at continuing to raise interest rates to curb inflation, which is still high.
The broader “Standard & Poor’s 500” index recorded its best week since last July at the close, on Friday, as it rose by 0.7%, equivalent to 29 points, to 4405 points, and achieved a weekly gain of 0.8%.
The Dow Jones Industrial Average rose 247.48 points, or 0.7%, to 34,346.90. The Nasdaq Composite Index rose 126.67 points, or 0.9%, to 13,590.65.
Yesterday, on the sidelines of the annual conference of the US Central Bank in Jackson Hole in the western state of Wyoming, Powell said that the rate of inflation is still very high and that policy makers are ready to raise interest again in order to curb the increase in prices.
He indicated that officials may keep interest rates unchanged next September. Powell’s comments did not come as a surprise to investors who expected the central bank to continue its policy of raising interest rates for a longer period. They also received his remarks, is the continuation of economic growth in the United States with ease to achieve more gains.
Tom Garretson, an analyst at RBC Wealth Management, told Bloomberg: “As has been the case for a while, Jerome Powell didn’t give the markets anything revealing today, which is probably what he was aiming for. The market’s reaction seems consistent. With the notion that the Fed is done raising interest rates in the near term, but is still willing to raise them more if the economic data dictates.”
Philadelphia Fed President Patrick Harker said he would prefer to keep interest rates at current levels to allow cumulative tightening to take its toll in the system.
His counterpart in Cleveland, Loretta Mester, said lowering interest rates would be a “worse mistake” than raising them too much.
2023-08-26 09:26:15
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