Wall Street rejoiced after the statements of the President of the US Federal Reserve System (FRS), who admitted the possibility of a slowdown in interest rate hikes back in December.
After Powell’s words, the Standard & Poor’s 500 added 3.09% to 4.080.11 points, ending November, recording the second consecutive monthly increase, which has not been since August last year.
In turn, the industrial Dow Jones ended the day, adding 2.18% to 34,589.77 pointsthus earning a score 20% above the low recorded on 30 September.
The Nasdaq Tech Composite rose 4.41% to 11,468 pointsprolongation of highs for about two months.
Markets have been revitalized Powell’s words. The Fed President acknowledged – in line with the minutes of the central bank’s latest monetary policy meeting – the need to slow down the pace of interest rate increases and pointed to the December meeting as the date when this could happen.
However, Powell stressed that further increases in the base rate should be expected in order to bring inflation to the target level of 2%. “History strongly warns against premature relief [do endurecimento] monetary policy. We will stay the course until the job is done.”
Thus, the market expects that, unlike the last four consecutive increases of 75 basis points, the federal funds rate will rise only 50 basis points at the next US central bank meeting scheduled for December 13 and 14. The key interest rate is now set in the range of 3.75% to 4%.
