After the US debt ceiling crisis was overcome, investors turned their focus to the Fed, while the US Federal Reserve’s signal to stop increases the appetite for risk.
While the American Stock Exchanges rallied on these developments on Thursday, the Nasdaq 100 rose 1.3 percent and the S&P 500 rose 1 percent. Futures on both indices also point to a continuation of the uptrend.
The positive atmosphere is also reflected in Asia Pacific. The Hang Seng index, which rose a medium 4% in today’s session, rose on the back of purchases from Chinese technology companies.
With the disappearance of risk factors, the dollar fell sharply against developed country currencies. The Bloomberg Dollar Index fell 0.6 percent on Thursday, the hardest daily drop in more than two months. The index is still down 0.2 percent today.
The US two-year bond yield fell by 21 basis points to 4.35 percent this week, as expectations for the Fed to keep interest rates steady gained strength.
‘Fixed interest’ signals from Fed officials are increasing
Fed member Patrick Harker reinforced the emphasis that the bank should moderate interest rate hikes. “I think we are close to the point where we will hold rates steady and monetary policy will do its job to keep inflation down,” the Philadelphia Fed Leader, who has the right to vote this year, said.
Speaking at the National Association for Business Economics event, Harker said, “We should at least skip this meeting. We need to give a medium,” he said. James Bullard, one of the hawkish members of the Fed, who did not have the right to vote this year, put the view that “we are at the lower band of restrictive levels to reduce inflation in order to reduce inflation” in the article he published. The next meeting of the Fed, which has increased interest rates by 5 percentage points in the last 14 months, will be held on 13-14 June.
Source: Bloomberg HT