Financial Markets Daily Report08 March 2023
Federal Reserve president Jerome Powell’s hawkish rhetoric before the US Senate pushed upwards the financial market expectations for interest rates path ahead. In particular, investors now attach a higher probability to a 50bp hike than to a 25bp move at March’s meeting.
- Federal Reserve president Jerome Powell’s hawkish rhetoric before the US Senate pushed upwards the financial market expectations for interest rates path ahead. In particular, investors now attach a higher probability to a 50bp hike than to a 25bp move at March’s meeting.
- In his speech, Powell said that he expects a higher terminal rate than in December (which was at the 5.00%-5.25% range) and that, in order to reach it sooner, the Fed would consider accelerating the pace of hikes.
- In this context, the short end of the US yield curve rose while longer term yields were broadly stable. Stock indices declined across the board and the US dollar strengthened against most currencies.
- Today the focus will be on the US employment data (JOLTS openings and ADP employment creation) and on euro area final estimate of Q1 GDP growth, which will probably show a downward revision from the 0.1% q/q released initially.