ArticlesWeekly Analysis

The US Federal Reserve released the minutes of its last meeting in which it raised interest rates by 75 basis points, now to 2.5%.

The Fed minutes proved that all members agreed to raise interest rates by 75 basis points.

According to the meeting minutes, the Fed members expect interest rates to continue, but they know they have to stop at a certain point that is not yet ripe.

The Fed said that the commitment to tightening policy is to fulfill their commitment to maintain the economy and control inflation.

Fed members believed that the slowdown in demand would play an important role in curbing inflation.

Stock and early data
Stocks fell on Wednesday as the rally on Wall Street that has driven prices higher since mid-June appeared to lose steam after recent retail earnings cast doubt on the strength of consumer spending.

The Dow Jones Industrial Average fell 159 points, or 0.49%, while the S&P 500 and Nasdaq Composite fell 0.7% and 1.24%, respectively.

Merchants continued to comb through corporate earnings from the retail sector that kicked off with Walmart and Home Depot on Tuesday. Target stocks slipped after the retailer posted broadly-beating earnings as it grappled with excess inventory, while Lowe’s traded higher despite the mixed quarter.

Meanwhile, the Census Bureau said Wednesday that retail sales remained unchanged in July amid a drop in auto sales and gasoline prices, even though consumers increased spending online.

Unemployment and violent politics
Fed officials expect that the unemployment rate will rise in the second half of 2022. They also expect that the economic performance in July is clearly weaker than in June.

Markets reacted to the Fed minutes by raising the possibility of raising interest rates by 50 basis points in September, with nearly 60% of experts’ opinions.

Politicians in power saw that it would be a problem if people questioned the Fed’s ability to solve the price hike crisis, and saw it appropriate for the Fed to maintain its hawkish policy for some time.

Markets now
The main indices of the US market are falling strongly today, with the Nasdaq index down by 0.93%, while the Dow Jones is down by 0.36%, and the S&P 500 is down by 0.45%.

At the same time, the US Dollar Index is marginally moving, recording 106.42 against a basket of foreign currencies. The US Treasury bond yields are rising strongly, on top of which are the 10-year Treasury bond yields, which rise by 3.29% to record 2.917%, as well as the two-year Treasury bond yields, which rise by 1.43 to record 3.2974%.

Gold is now down more than half a point, to record gold contracts at $1,779.30 an ounce, down 0.6%, and silver down by 1.42% to record 19.802.

As for oil, crude oil rose to $88.16 a barrel, and Brent oil rose to $93.62 a barrel, with increases ranging between 1.92% for the first and 1.4% for the second.

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