(CercleFinance.com) – European stock markets are in sharp decline (-0.5% in London, -0.8% in Frankfurt, -1.1% in Paris), in the wake of Wall Street the day before where the conclusion of the FOMC and the comments of its chairman Jerome Powell were generally warmly received.
‘The US Federal Reserve has maintained its key rates at a stable level and has expressed its intention to keep them at a restrictive level for longer than expected,’ points out Tiffany Wilding, economist for North America at PIMCO.
This highlights that real GDP growth in the United States ‘has proven much more resilient, which has led to substantial revisions of economic projections by members of the FOMC (Federal Open Market Committee)’.
‘The Fed has removed some rate cuts next year from its dot plot, so markets are correctly interpreting a less ‘dovish’ outlook,’ notes Jack McIntyre, manager at Brandywine Overall.
Investors can now turn their attention to the Bank of England, which could announce, in the middle of the day, a rate increase of 25 basis points in its key rate to bring it to 5.5%, according to some analysts.
They will also be attentive to numerous American macroeconomic data this afternoon, including the Philly Fed activity index, then sales of existing homes and the leading indicators from the Conference Board for the month of August.
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