NEWSLETTER
Thursday / September 29Sep 29
Thursday / May 5
Fed hikes rates
The US Federal Reserve on Wednesday raised its benchmark interest rate by half a percentage point, in its most aggressive step yet as inflation hits a 40-year high.
“Inflation is much too high and we understand the hardship it is causing. We’re moving expeditiously to bring it back down,” Fed Chairman Jerome Powell said during a news conference, He noted the burden of inflation on lower-income people, saying, “we’re strongly committed to restoring price stability.”
Along with the move higher in rates, the central bank indicated it will begin reducing asset holdings on its $9 trillion balance sheet.
The pushes the federal funds rate to a range of 0.75%-1%. Current market pricing has the rate rising to 2.75%-3% by year’s end, according to CME Group data.
“Seventy-five basis points is not something the committee is actively considering,” Powell said, despite market pricing that had leaned heavily towards the Fed hiking by three-quarters of a percentage point in June.
“The American economy is very strong and well-positioned to handle tighter monetary policy,” he said, adding that he foresees a “soft or softish” landing for the economy despite tighter monetary policy.
Swedish NATO bid
Sweden has received assurances from the United States that it would receive support during the period a potential application to join NATO is processed by the 30 nations in the alliance, Foreign Minister Ann Linde said in Washington on Wednesday.
Both Sweden and Finland are concerned they would be vulnerable during an application process, which could take up to a year to be approved by all NATO's members.
"Naturally, I'm not going to go into any details, but I feel very sure that now we have an American assurance," Linde told Swedish TV from Washington after meeting U.S. Secretary of State Antony Blinken. "However, not concrete security guarantees, those you can only get if you are a full member of NATO," she added.
Linde declined to say what assurances she had received from Blinken.
Kremlin denial
The Kremlin on Wednesday dismissed speculation that President Vladimir Putin planned to declare war against Ukraine and declare a national mobilisation on May 9 when Russia commemorates the Soviet Union's victory in World War Two.
Putin has so far characterised Russia's actions in Ukraine as a "special military operation", not a war. But Western politicians and some Russia watchers have speculated that he could be preparing for a major announcement next Monday with a range of possible scenarios ranging from an outright declaration of war to a declaration of victory.
Putin's spokesperson Peskov called both allegations 'nonsense.'
US stocks
US stocks jumped sharply on Wednesday after the Federal Reserve raised rates by a widely anticipated half percentage point and Chairman Jerome Powell ruled out getting even more aggressive.
The Dow Jones Industrial Average rose 932.27 points, or 2.81%, to close at 34,061.06. The S&P 500 gained 2.99% to 4,300.17. The tech-heavy Nasdaq Composite jumped 3.19% to 12,964.86.
The US Federal Reserve on Wednesday raised its benchmark interest rate by half a percentage point, in its most aggressive step yet as inflation hits a 40-year high.
“Inflation is much too high and we understand the hardship it is causing. We’re moving expeditiously to bring it back down,” Fed Chairman Jerome Powell said during a news conference, He noted the burden of inflation on lower-income people, saying, “we’re strongly committed to restoring price stability.”
Along with the move higher in rates, the central bank indicated it will begin reducing asset holdings on its $9 trillion balance sheet.
The pushes the federal funds rate to a range of 0.75%-1%. Current market pricing has the rate rising to 2.75%-3% by year’s end, according to CME Group data.
“Seventy-five basis points is not something the committee is actively considering,” Powell said, despite market pricing that had leaned heavily towards the Fed hiking by three-quarters of a percentage point in June.
“The American economy is very strong and well-positioned to handle tighter monetary policy,” he said, adding that he foresees a “soft or softish” landing for the economy despite tighter monetary policy.
Swedish NATO bid
Sweden has received assurances from the United States that it would receive support during the period a potential application to join NATO is processed by the 30 nations in the alliance, Foreign Minister Ann Linde said in Washington on Wednesday.
Both Sweden and Finland are concerned they would be vulnerable during an application process, which could take up to a year to be approved by all NATO's members.
"Naturally, I'm not going to go into any details, but I feel very sure that now we have an American assurance," Linde told Swedish TV from Washington after meeting U.S. Secretary of State Antony Blinken. "However, not concrete security guarantees, those you can only get if you are a full member of NATO," she added.
Linde declined to say what assurances she had received from Blinken.
Kremlin denial
The Kremlin on Wednesday dismissed speculation that President Vladimir Putin planned to declare war against Ukraine and declare a national mobilisation on May 9 when Russia commemorates the Soviet Union's victory in World War Two.
Putin has so far characterised Russia's actions in Ukraine as a "special military operation", not a war. But Western politicians and some Russia watchers have speculated that he could be preparing for a major announcement next Monday with a range of possible scenarios ranging from an outright declaration of war to a declaration of victory.
Putin's spokesperson Peskov called both allegations 'nonsense.'
US stocks
US stocks jumped sharply on Wednesday after the Federal Reserve raised rates by a widely anticipated half percentage point and Chairman Jerome Powell ruled out getting even more aggressive.
The Dow Jones Industrial Average rose 932.27 points, or 2.81%, to close at 34,061.06. The S&P 500 gained 2.99% to 4,300.17. The tech-heavy Nasdaq Composite jumped 3.19% to 12,964.86.
