Powell's comments

US Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank could accelerate the tapering process.

Testing to the Senate banking committee, Powell said he thinks monthly bond purchases could be cut at a rate higher than $15 billion per month announced earlier this month.

Powell added that he expects the issue to be discussed at the December meeting.

“At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner,” he said. “I expect that we will discuss that at our upcoming meeting.”

Stocks, already under pressure from the new Covid variant Omicron, fell after Powell's comments, while government bond yields rose.

Stocks reaction

US stocks tumbled on Tuesday after Powell's comments and risks over new Covid variant Omicron fears.

The Dow Jones Industrial Average fell 652.22 points to 34,483.72, driven by losses in American Express and Salesforce.

The S&P500 index fell 1.9% to 4,567.00. The tech-heavy Nasdaq Composite fell nearly 1.6% to 15,537.69.

The small-cap Russell 2000 slid 1.9%, closing at 2,198.91 as economically sensitive stocks were affected.

EU inflation

Eurozone inflation rate rose to a record high in November, according to preliminary data released on Tuesday.

Headline inflation was 4.9% compared to the same month of the previous year. That's higher than Reuters' consensus estimates of 4.5%, and the 4.1% figure in October. The figure is the highest recorded in the last 25 years for which data were compiled.

High energy prices contributed the most to inflation in the latest inflation reading. According to Eurostat, the European statistical office, energy saw the highest annual price increase in November, at 27.4%, up from 23.7% in October.

"We shouldn't accept very high inflation rates in the long run, we should watch it closely, but experts don't think it's a long-term phenomenon," Merkel's next German Chancellor, Olof Scholz, told Bild in an interview.

Ukraine border

Russian President Vladimir Putin said on Tuesday that Russia will have to act if its "red lines" on Ukraine are crossed by NATO.

Putin said Moscow would view the deployment of certain NATO attack missile capabilities on Ukrainian soil as crossing the red line.

Speaking at an investment forum in Moscow, Putin said he hopes common sense will prevail on all sides, but says he wants NATO to be aware of Russia's security concerns in Ukraine and know how the West will respond if it continues to assist Kiev in expanding its military. .

"If some kind of offensive systems appear on the territory of Ukraine, the flight time to Moscow will be 7-10 minutes, and if a hypersonic weapon is deployed, it will be 5 minutes. Think about it. What should we do in such a scenario? Then it's similar to those who threaten us in this way."

"What are we to do in such a scenario? We will have to then create something similar in relation to those who threaten us in that way. And we can do that now."