- US stock indices spooked by Fed Chair Powell’s “hawkish” comments.
- USD sold off while safe haven currencies, JPY & CHF in demand.
- Hong Kong indexes recovered from the 200-day moving mean, and Asian stocks outperformed.
No surprise from The the US central bank, Federal Reserve’s policy meeting outcome yesterday where the Fed hiked its policy Fed funds rate by 25 basis points as expected, its 10th In this current tightening phase, the target range is 5% to 5.25 %.
Most importantly, it has signalled a potential pause on its current interest hiking cycle via a change of tonality in its monetary policy statement; it no longer says it “anticipates” further rates will be needed, only that it will watch incoming data to determine if more hikes “may be appropriate.”
The surprising bit came during Fed Chairman Powell’s press conference where he made several “hawkish” comments that implied the current stance of the Fed’s operating modus to be skewed towards inflation targeting rather than to address the potential credit crunch from the US regional banking turmoil that can lead to slower economic growth and a weak labour market;
“Conditions in the banking sector have improved.”
“We’re committed…
