An unmissable event at the end of the summer, the Jackson Hole symposium occupied people’s minds all week, in an unprecedented context of a sharp rise in inflation.
Every year, at the same time, the scenario repeats itself tirelessly. Financial markets are activating pause mode, with no catalyst other than the Jackson Hole symposium, scheduled for Friday. This week, the Cac 40 had three calm sessions, with low fluctuations and narrow trading volumes, and two more nervous sessions.
On Monday August 22, the Parisian index fell in the face of the new surge in energy prices in Europe (gas, electricity), synonymous with an increased risk of recession on the Old Continent, and the new plunge of the euro below the parity with the dollar. He was also worried about the content of Jerome (Jay) Powell’s speech at the end of the week. Friday, at 4 p.m., the boss of the American Federal Reserve spoke during the traditional high mass of economists and great financiers of the planet. Its determination to stem inflation with the tools of monetary policy sent a chill through the market, which kept in mind the change in tone of July, when Jerome Powell had signaled that it would be necessary “likely to slow the pace of rate hikes”. “Restoring price stability will take some time and will require aggressive use of our tools to better balance supply and demand.he reframed on Friday, fighting inflation could be painful. » In Paris as on Wall Street, investors have come to the same conclusion: interest rates will be raised again by 75 basis points in September, not 50 basis points. What will happen in the euro zone? Rumors swirled around Friday. European Central Bank officials are reportedly keen to discuss a similarly large 75 basis point hike next month. Combined, these two pieces of information tripped up the Cac 40, which ended the week below 6,300 points.
SYLVIE AUBERT