(CercleFinance.com) – The New York Stock Exchange is moving on an uncertain note on Friday following a speech by Jerome Powell which did not completely reassure investors as to the Fed’s intentions in terms of rates.
Just over an hour after opening, the Dow Jones is virtually unchanged at 34,105.2 points, while the Nasdaq Composite is also stable at 13,467.7 points.
Since the Jackson Hole summit, the head of the Federal Reserve somewhat dampened investors’ optimism this morning by assuring that the American central bank was ready to raise its interest rates further.
Jerome Powell added that the maintenance of a ‘restrictive’ monetary policy would remain necessary as long as inflation has not fallen back below the institution’s target, set at 2%.
This diagnosis came to remove the prospect of possible rate cuts next year and break the positive momentum that was emerging at the very beginning of the session on Wall Street.
But investors seem to hesitate between this unaccommodating tone and Powell’s determination to ‘proceed with caution’ so as not to undermine economic growth too much.
According to the CME Group’s FedWatch barometer, markets estimate the probability of a rate hike of 25 basis points in September at more than 17%, compared to 11% a week ago.
On the bond market, investors also seem to favor the scenario of a new turn of the screw, the yield of ten-year Treasuries taking up four basis points to 4.28%.
In the economic chapter, the US consumer confidence index fell to 69.5 in August from 71.6 in July, show the final results of the monthly survey from the University of Michigan.
Over the week as a whole, the Dow Jones has so far lost 1.2%, while the Nasdaq has posted a weekly gain of 1.2%.
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