The Federal Reserve Gets Stronger After Data Exceeds Expectations… Strange Confusion in the Markets By Investing.com

© Reuters.

Investing.com – US consumer confidence data, which came in opposite of expectations, was released just moments ago, reinforcing a view that the economy is still far from recessionary, while fueling expectations for a strong increase in the next meeting.

(November) data revealed a recording of 102.2 points against expectations of recording levels of 100 points, while the previous reading during October recorded 102.2 points.

The latest data comes after the statements of the heads and officials of the US Reserve Bank regarding the continuation of the Fed’s hawkish policy in order for the bank to achieve its inflation targets.

Strength and confidence

And a member of the US Federal Reserve, James Bullard, said yesterday, Monday, that the bank has several options to tighten monetary policy, pointing out that the number of points targeted for raising interest has not yet been determined.

New York Fed President John Williams said he believes the Fed will need to raise interest rates high enough to put pressure on inflation, and to keep them that way throughout next year.

It is noteworthy that the statements of the Fed officials come at a time when the markets started pricing interest rates by 50 basis points at the next meeting, with expectations of the start of a slowdown in the monetary tightening policy cycle that exhausted most of the assets.

Don’t underestimate us

Bullard indicated that the markets are underestimating the upcoming Fed meeting, which may be more hawkish than they think.

Fed member Borlad added that the bank will continue to raise over the next year, and the final interest rate is expected to be between 5% and 7%.

And the Fed member continued, that inflation is still high and the bank is still working to reduce it, adding that high interest rates may continue until 2024 and not next year.

interest rates

Next on investors’ radar is Federal Reserve Chairman Jerome Powell’s speech on Wednesday on the US economy and labor market; For clues about monetary policy expectations.

The majority of market participants are pricing in a 50 basis point increase at the Fed’s December meeting, after minutes from the last policy meeting indicated a slowdown in the pace of increases.

markets now

All indices succeeded in erasing their losses at the beginning of trading, and turning into the green zone, despite the positive data that gives the Fed an impetus to continue its strict policy.

However, despite the rises taking place now, volatility still dominates the market’s dealings, which is a feature that has become predominant in the dealings of the last sessions.

Wall Street

  • It rises marginally within 10 points, after declining in the first minutes by 0.2%.

  • The Standard & Poor’s index rose 0.12%, after falling in the first minutes by about 0.3%.

  • While the Nasdaq technology stock index increased by 0.1% after falling by 0.2% in the first minutes.

Rises

Gold extended its gains, with futures contracts jumping to $1,755, an increase of $15 an ounce, up 0.85%.

Spot contracts rose $16 to levels near $1,757 an ounce, an increase of 0.9% during these moments of trading today, Tuesday.

The dollar is going down

The main drop fell within the range of 0.2%, to levels close to 106.5 points, during these moments of trading today, Tuesday.

On the other hand, the 10-year yield turned into the green zone, increasing by 0.032 points, to reach levels of 3.71%.

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