Here’s how trading on major US stock indexes concluded on Thursday:
- The S&P 500 collective index, which comprises 500 of the largest publicly traded companies in the United States, fell 0.32%.
- The Nasdaq Composite, dominated by technology stocks, fell 0.35%.
- The Dow Jones Industrial Average, which is made up of 30 handpicked supposedly major stocks, fell 0.09 percent
Fed member James Bullard said on Thursday that the key interest rate, which is now between 3.75 and 4.0%, is not yet in an area that can be considered tight enough. Market interest rates will increase cautiously on Thursday.
Bullard is known as one of the great central bank “hawks,” which means he likes to advocate for tighter monetary policy. Back in March, he advocated raising the key interest rate to three percent at the end of 2022, while a majority of central bank members expected 1.5-2.0 percent.
In April, Bullard said in an interview with the Financial Times that it is a “fantasy” to believe that the Fed can lower inflation without raising interest rates to a tightening level. At that time, the annual increase in inflation was 8.5%, while the benchmark interest rate was between 0.25 and 0.5%.
In October, the annual increase in inflation was 7.7 per cent. The figure was lower than expected, but inflation is still the highest in decades and well above the long-term target of two percent.
The market now values an 80% probability that the interest rate will be increased by 0.5 percentage points in December. At the same time, 0.75 percentage points are given a 20% probability.
Fed member Esther George expressed concern about the tight job market Wednesday in the Wall Street Journal. As of right now, there are two jobless vacancies in the United States, which is the highest in many decades.
– I see such a tight labor market that I don’t see how inflation can continue to be reduced without a major brake, and perhaps even a contraction of the economy, George said. (Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using the links, which lead directly to our pages. Copying or other forms of use of all or part of the content may only take place with written permission or as permitted by law. For additional terms see her.
