The Dow Jones Industrial was up 0.23% at the close. and amounted to 37,903.29 points. The S&P 500 lost 0.34% at the end of the day. and amounted to 5,018.39 points. The Nasdaq Composite fell 0.33%. and closed the session at 15,605.48 points. The Russell 2000 index of small-cap companies is up 0.62%. and amounts to 1,986.42 points. The VIX volatility index falls by 1.66%, to 15.39 points. The yield on 2-year US treasury bonds fell to 4.63%.
“Inflation is in a sideways trend, therefore it does not indicate any rate cuts”
The Fed left interest rates unchanged. in the USA unchanged at 5.25-5.50 percent. He also said that additional tightening of monetary policy would depend on macro data. The decision on interest rates was in line with market expectations and was taken unanimously. In the current cycle of tightening monetary policy, the Fed has raised interest rates. by a total of 525 bps. Interest rates in the USA they are the highest since 2007, and the pace of their increase is the highest since the early 1980s, when Paul Volcker was the Fed president.
“Inflation is in a sideways trend, therefore it does not indicate a reduction in interest rates.” – Fed Chairman Jerome Powell said during Wednesday's conference after the Reserve meeting. Powell added that an increase in interest rates would also is unlikely.
We will look at the entire data. We believe that policy is well-placed to take into account the different paths the economy may take. (..) We also said that it would not be appropriate to withdraw our restrictive monetary policy stance until we have greater confidence that inflation is falling to 2% on a sustainable basis. inflation is in a sideways trend and therefore we are not gaining much confidence that it will decline,” said the FOMC chairman.
In his opinion, in such a case it would be appropriate to refrain from reducing interest rates. “There are other paths the economy could take that would make us want to consider interest rate cuts. Two of those paths are that we will actually gain more confidence if inflation continues to fall to 2 percent. Another path could be for example, unexpected weakening in the labor market. These are paths in which interest rate cuts could be considered. This will depend on the data,” he added.
“It is unlikely that the next move in interest rates will be an increase”
According to Powell, an increase in interest rates will also occur. is unlikely. “It is unlikely that the next move in interest rates will be an increase,” said the FOMC chairman. Powell indicated that further progress in the fight against inflation is uncertain. He added that inflation had dropped significantly over the last year, although the labor market remained strong, and that was very good news. “However, inflation is still too high. Further progress in eliminating inflation is uncertain. And the road ahead is uncertain. (…) There are paths the economy can follow that would involve cutting interest rates. There are also paths that that they would not lead to this. I am not sure which of these paths will materialize,” said the Fed president.
On Wednesday, investors received a large portion of the latest macro data from the American economy. The number of unfilled jobs in the US, according to the JOLTS survey, was 8.488 million in March, compared to 8.813 million recorded a month earlier after a correction from 8.756 million. The industrial activity index in the US in April was 49.2 points. against the consensus of 50 points. and 50.3 points in last month. The PMI index, determining the economic situation in the American industrial sector, prepared by S&P Global, dropped to 50 points in April. with 51.9 points in the previous month – given in the second calculation. The initial estimate was 49.9 points.
In the USA, there was a decline in the MBA mortgage application index – the seasonally adjusted index fell by 2.3%. during the week ending April 26. US companies added 192,000 in April. jobs compared to an increase of 208 thousand in the previous month, after correction from 184 thousand – according to a report by the private company ADP Research Institute. Analysts estimated that the ADP report would indicate an increase in jobs in the US by 179,000.
US crude oil inventories last week increased by 7.265 million barrels, or 1.6%, to 460.9 million barrels. Gasoline stocks increased by 344,000 during this time. barrels, i.e. by 0.2 percent, to 227.1 million barrels. Reserves of distilled fuels, including heating oil, decreased by PLN 700,000. barrels, i.e. by 0.6%, to 11.9 million barrels. On the oil market, WTI contracts for May are down by 3.43%. to USD 79.11 per barrel, and June Brent futures fall by 3.29%. up to USD 83.49/b.
