The shares fell this Tuesday in New York after the president of the Federal Reserve of the United States, Jerome Powellindicated his position in favor of a more aggressive adjustment in interest rates, which revived the specter of a recession and a forced landing of the economy.
The Dow Jones industrial average fell 1.7%, while the broader S&P 500 index fell 1.5% and the Nasdaq technology indicator fell 1.3%, according to data provided by the New York Stock Exchange (NYMEX).
Powell, speaking before the Senate Finance Committee, said they are ready to “accelerate the pace of adjustment and push rates higher if inflation continues to rise.”
“The latest economic data has been stronger than expected, suggesting that the final level of interest rates is likely to be higher than anticipated,” Powell said.
The official said that “if the totality of the data indicates that a faster adjustment is justified, we would be prepared to increase the pace of rate hikes.”
“Although inflation has been moderating in recent months, the process to bring inflation back down to 2% has a long way to go and is likely to be bumpyPowell said.
Jerome Powell said they are ready to “accelerate the pace of tightening and push rates higher if inflation continues to rise.”
“We have two or three major data releases to look at before the board meeting and these are going to be very important in our assessment of this relatively recent data,” he told lawmakers, referring to the Federal Open Market Committee.
Short-term bond yields rose, stocks fell, and the dollar strengthened.
The 2-year Treasury yield, which is driven by Fed expectations, shot up to 5% from 4.9% and is at its highest level since 2007 and exceeded by one percentage point for the first time. since 1981, to the yield of the 10-year Treasury Bond that closed at 4% and reached its highest level since November.
Some analysts considered that Powell’s comments fuel the probability that the Fed will adjust its reference rate by 50 basis points at the meeting from March 21 to 22, although there are many operators who favor a 25-point hike. basic.
The Dow Jones industrial average fell 1.7%, while the broader S&P 500 index fell 1.5% and the Nasdaq technology indicator fell 1.3%, according to data provided by the New York Stock Exchange (NYMEX).
The Fed expects two key pieces of information. This Friday the unemployment figures for February will be known and the following week the inflation and with these they will have to evaluate the monetary policy.
In any case, this Wednesday there could be more signs since Powell must appear before a commission in the House of Representatives.
The only rise in the Dow Jones was for Merck +0.2%.
In it S&P 500 DISH Network +4%, United Airlines +3% and ON Semiconductors +1.7% stood out.
In it nasdaqthe best was recorded in DocuSign and AMD +1.2%, Mercado Libre +0.7% and Dexcom and Airbnb +0.5%.
In Europe, stocks fell after Powell’s comments and are preparing for the next rate hike by the European Central Bank (ECB).
In the leading index Euro Stoxx 50 which fell 0.8%, the rises of the British Flutter Entertainment +2% and the French Danone +1.1%, Sanofi +0.9%, Air Liquide +0.7% and Hermes +0.6% stood out.
In London, the FTSE it fell 0.1%, while the DAX in Frankfurt fell 0.6% and the CAC 40 in Paris fell 0.5%.
In the Mediterranean, the IBEX 35 Madrid fell 1.1%, while the Milan MIB contracted 0.7%.
