A positive jobs report spurred Wall Street to push some stocks and Treasuries higher on Friday, but investor optimism was tempered by looming inflation,
The central banks across the world seem to have woken up to the reality of rising inflation, and they are using the one weapon in their hands, the interest rate, to tame inflation. The United Federal Reserve’s Federal Open Market Committee (FOMC)
Asian and European stocks mostly sank on Friday on hawkish comments from the Federal Reserve about its monetary tightening plans, sending the dollar sharply higher against the euro.
The US Federal Reserve has raised the bank interest rate from a near-zero level to 0.25 to 0.50 per cent range, for the first time in four years as inflation stubbornly stood at 6.1 per cent. Federal Reserve Chairman Jerome Powell said, “As I looked round the
US household wealth fell by a record $6.1 trillion in the second quarter to its lowest in a year as a bear market in stocks far outweighed further gains in real estate values,
The Federal Reserve has raised interest rates on Wednesday by 75 basis points, taking the interest rate to between 1.5 and 1.75 per cent, which is still quite low. But it is expected that interest rates could be as high as 3.4 per cent by the end of 2022 even as inflation is expected to hover round 5.2 in the year.
The US dollar extended its rally on Monday, hitting a five-week high on the yen after US Federal Reserve Chair Jerome Powell signalled interest rates would be kept higher for longer to bring down soaring inflation.
Britain’s central bank raised its key interest rate by another half-percentage point on Thursday, avoiding more aggressive steps to tame inflation that the US Federal Reserve and other banks have taken.
The rupee was trading at 82.32 per dollar by 0436 GMT, compared to its previous close 0f 81.88. In terms of the UAE dirham, the Indian rupee was trading around Dhs22.40.