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>> Wall Street rebounds sharply after several difficult sessions
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>> Wall Street, weighted by Apple and Nvidia, plunges to closing
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The New York Stock Exchange up while waiting for Powell.
Photo: AFP / VNA / CVN |
Its flagship index, the Dow Jones Industrial Average, gained 2.50% to close at 25,366.43 points, recording occasionally its best session since March. The Nasdaq, with strong technological coloration, took 2.95% to finish at 7,291.59 points. The broad S & P 500 Index gained 2.30% to end at 2,743.78 points. In front of the New York Economic Club, the boss of the Fed simply "says the magic words"The market was waiting," noted Gregori Volokhine of Meeschaert Financial Services.
Investors had indeed been troubled when Jerome Powell had estimated in early October that the Fed was "still very far" from the "neutral" rate to which it aspires, one that promotes growth without feeding price increases. These remarks had largely contributed to trigger a period of strong turbulence on Wall Street. Believing Wednesday, November 28 that rates were "just below" a neutral level, "he pointed out that we were close to the end of the cycle of the rate rise", said Peter Cardillo of Spartan Capital Securities.We can still expect a new rise in December, but maybe only one or two next year "where market observers have been anticipating up to now two to three increases, he said.
Enough to reassure investors on Wall Street, who fear for several months a too rapid rise in interest rates. An abrupt tightening of US monetary policy could, in their view, slow growth by making particularly expensive loans for individuals and businesses. "The fact that Mr Powell repeated that monetary policy will be decided on the basis of economic data has also reassured investors", according to Cardillo: this suggests that the institution will adjust its decisions if the economy slows down.
Mr. Powell's comments on Wednesday, November 28, however, are not "not as cautious as the market thinks," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. The boss of the Fed actually felt that the rates were just below "of the range of estimates " where they can be considered neutral, he said.
If we consider that this range is currently between 2.5% and 3.5%, "there are still three increases before reaching the middle "he said. In the bond market, the US 10-year debt rate stabilized at 21.15 GMT to 3.056%, against 3.057% Tuesday at the close, and the 30-year rose to 3.345%, against 3.319% the day before.
AFP / VNA / CVN
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