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US stocks rose on Friday as markets ignored Powell’s warnings about possible further Fed policy tightening.
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The Fed chief said the central bank may raise interest rates further “if appropriate” to curb inflation.
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Investors seemed to ignore this warning, which sent the Dow Jones index up nearly 250 points during the session.
US stocks closed higher on Friday, as investors shrugged off Jerome Powell’s speech at the Jackson Hole Symposium, where the Federal Reserve chairman warned that it might be appropriate to tighten central bank policy.
At the event, Powell reaffirmed that prices remain above the Fed’s 2% inflation target, even though central bankers have made good progress in moderating inflation over the past year. Prices only accelerated 3.3% in Julydown from A peak of 9.1% recorded in June 2022.
“The Fed’s job is to bring inflation down to our 2% target, and we will do that,” Powell said in his Friday morning speech, adding that the central bank will continue to assess low inflation and raise interest rates “if appropriate.”
However, the outlook for the Fed’s future policy moves remained roughly unchanged, although investors slightly raised their bets that the central bank would raise interest rates by another 25 basis points at its policy meeting in November. Such a price move has been priced with a probability of 46%, according to CME FedWatch toolup from 42% probability yesterday.
“Powell didn’t say much to change the market outlook in the very short term,” Gary Pzygio of CIBC Private Wealth said in a statement on Friday. “After September, markets may have to revise interest rate expectations higher, especially if the recent bout of faster-than-expected growth continues.”
Here is where US indices stood at the 4:00pm closing bell on Friday:
Here’s what else happened today:
In commodities, bonds and cryptocurrencies:
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West Texas Intermediate Crude oil rose by 1.32% to $80.09 a barrel. BrentThe international index rose 1.7 percent to $84.80 a barrel.
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gold And gold fell by 0.28% to $ 1942.60 an ounce.
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The yield on the 10-year Treasury note was nearly flat at 4.239%.
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bitcoin It fell by 0.01%, to $26,015.
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