It was a beautiful day on Wall Street, to declare to the Chairman of the American Central Bank, Federal Reserve, and Jerome Powell, was preparing the fourth increase in the key rate this year. As a result, the Dow Jones reached a record high in early Wednesday trade, a state-of 24.057 points fell in the top of almost 900 points. Towards the end of trading, prices recovered a little, but compared to Tuesday, a significant decrease was found for most of the courses. The Dow Jones closed with a loss of 1.49 percent in 23.323 points, the S&P 500 closed with 2506 points and a loss of 1.54 percent.
editor in the business, responsible for the financial market.
F. A. Z.
plummeted, leading American share indexes to their lowest level since the autumn of 2017, and by technical analysis broke from the point of view of the chart, important support is brands. In Germany, the Dax plunged in the OTC trade the Evening compared to the official close of trading of 10.766 score more than 100 points. The protection of the investors were looking at the bond market where the yield on the ten year Treasury fell bonds with 2.76 percent, the lowest level since the spring.
ahead of a widely expected interest rate hike by the Fed by 0.25 percentage points to a corridor of 2.25 to 2.50 percent, and a press conference in the Powell unequivocally made it clear that the Fed makes its monetary policy not by the President from the White house dictate was gone. Trump had communicated prior to the meeting of the Fed in several messages over the short message service Twitter unequivocally that he does not want rate increase. Just the thought of such a step would be a proof of madness. Trump, who claimed in the past, in the bull market, the quality of its policy on the share market, represents since the fall of the share prices of the opinion, for the bear market the Fed alone was responsible.
“We are politically independent and have our mandate from the Congress, which we feel, without limitation, obliged,” said Powell. At the same time the Chairman of the Fed has let it be known that he, unlike Trump, the reaction of the stock market is not a very big importance: “We look at individual markets but on the General financial conditions, the consequences of our monetary policy.” The Fed will make decisions alone on the basis of your present economic data. Powell is not assured, moreover, that he believe that the criticism Trumps are harmful to the monetary policy and their acceptance. “We talk with many people, not just with business people, and know what is happening in our country,” said the Chairman.
Fed fears 2019 slower growth
the following courses are dumped on Wall Street, which had previously responded largely apathetic to the announcement of the widely expected increase in interest rates. The increase in key interest rates decided by the governing body of the Fed unanimously – this is also a note that the Central Bank is not willing to let the man in the White house intimidate you. In its statement, the Fed pointed mainly to the very good situation on the labour market in the case of a control that appears, the rate of inflation. The Fed has a double mandate: in addition to ensuring the stability of the price level, a high level of employment.
However, Powell had to acknowledge that the Fed can track not just of Trump, but also by many of the participants in the financial markets-held concerns over the sustainability of the economic recovery. So the Fed from today’s perspective, is planning increases for the year 2019, only two key interest rate, while they had made in the autumn of three interest rate hikes in prospect.
Powell praised the good condition of the American economy, but the Fed, expected in the coming year, a slowdown of economic growth. While many researchers for 2018, say an economic growth of around 3.3 percent, the Fed expects for the coming year an increase in output of 2.3 per cent: “today We see developments that make for a light Atomized the economic Outlook would suggest.” Basically, nothing would change but the positive perception of the economy by the Fed.