As investors continued to process Jerome Powell’s hawkish remarks from the previous day, US markets dipped on Thursday.
It was widely expected that the central bank will raise interest rates on Wednesday by 75 basis points, but Powell said it is still too early to change course while inflation is still high.
“The key takeaway is that there may be slower rate hikes in the future, but these may be higher than previously anticipated,” said Jamie Dutta, market analyst at Vantage. “For the Fed, it is now about the destination, not the journey. For markets, it is how long the FOMC raise rates in restrictive territory and into 2023.”
The Bank of England increased the benchmark interest rate by 75 basis points on Thursday, which caused gilt prices and the pound sterling to decline. Bond yields increased, and the dollar did too.
Original article here.