Dow futures gain 100 points, investors ease US inflation concerns | RYT9

Dow futures jumped more than 100 points today, indicating Wall Street will be higher tonight. As investors ease concerns about inflation in the US.

As of 8:03 p.m. Thai time, the Dow futures index gained 101 points, or 0.29%, to 34,455 points.

The financial market is expected to The Federal Reserve (Fed) will not change monetary policy at its meeting next week. Although the US revealed that inflation numbers rose more than expected yesterday.

The U.S. Department of Labor released its Consumer Price Index (CPI), a measure of inflation based on consumer spending, showing that the CPI rose 0.6% in May from month to month. That was 0.5% higher than analysts’ expectations after a 0.8% gain in April.

Year-over-year, the CPI rose 5.0 percent, its highest level since August 2008. And it beat analysts’ expectations of 4.7 percent after rising 4.2 percent in April.

Excluding food and energy, the core CPI rose 0.7% in May from month to month. That was 0.5% higher than analysts’ expectations after a 0.9% gain in April.

Year-over-year, the core CPI rose 3.8 percent in May, its highest level in 29 years, above expectations of 3.5 percent after rising 3.0 percent in April.

Analysts said inflation numbers were distorted by comparisons with unusually low bases last year. which at that time the price of the product had collapsed has been affected by the epidemic of COVID-19 and from the announcement of lockdown measures to control the epidemic

In addition, the surge in inflation in May was attributed to a rise in prices of used cars and trucks by more than 7 percent, accounting for about a third of the recent rebound in inflation. May The increase in used car prices is often a temporary phenomenon. and related to the spread of the COVID-19 virus

Analysts expect the Fed to maintain its stance on its monetary easing policy at its June 15-16 meeting, with the Fed holding the short-term interest rate at 0.00-0.25 percent and continuing to buy. Quantitative Easing (QE) bonds amounting to $120 billion/month

However, the Fed is expected to begin discussions on a QE cut at the Fed’s annual meeting in Jackson Hole, Wyoming, on Aug. 26-28, and will begin implementing a QE cut in December. Oct. or early next year before raising the policy rate in 2023

This year’s Jackson Hole conference will be a face-to-face meeting. After last year The Fed must hold its first video conferencing in nearly 40 years to reduce the risk of the coronavirus pandemic.

In the past, the meeting in Jackson Hole was a meeting that received a lot of attention. with central bank governors, finance ministers, academics and financial experts from countries around the world travel to attend meetings While the highlight will be at the then-Fed chair’s speech expressing his vision of the Fed’s monetary policy. and the US economic outlook

Fed Chairman Jerome Powell made a speech at the Jackson conference. Hole last year It announced a major change in monetary policy. The Fed will change its approach to inflation targets. This will allow inflation to rebound more than ever to support the labor market. and the US economy

At this year’s Jackson Hole meeting, Powell is expected to signal a QE cut amid a recovery in the US economy and labor market. After several Fed officials signaled financial markets to prepare for the withdrawal of the Fed’s earlier monetary easing.

In the past, emerging and developing economies have often been most exposed to the Fed’s tightening policies. And if the Fed changes monetary policy by cutting QE and raising interest rates It will result in capital flows back to the US. and has a heavy impact on emerging markets, as happened in 1998 and 2013.


–InfoQuest Translated and edited by Kongkiat Kovirakiti Tel.02-2535000 Email: kongkiat.k@infoquest.co.th–

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