The United States keeps setting the tone for a global market mood. While the US president’s rhetoric tends to weigh down investor confidence, other officials’ statements inspire optimism. Thus, Fed’s Chair Jerome Powell said that US economic expansion continues to show signs of strength and that further rates hikes remain appropriate.
“With solid household and business confidence, healthy levels of job creation, rising incomes and fiscal stimulus arriving, there is good reason to expect this strong performance will continue,” Powell said. He added that the current path of a gradual interest rate hikes was considered appropriate.
The market was relieved that odds of Fed raising its benchmark interest rate to a range of 2% to 2.25% at its next meeting grew considerably.
Despite some increases in inflation, Powell noted there was no sign it could move much above the Fed’s 2% target. “There does not seem to be an elevated risk of overheating,” he said.
Markets grew increasingly optimistic about the statement, with US stock indexes hitting new highs. Meanwhile, the dollar declined after Powell’s speech.
