Powell gives a stronger rate hike speech

On Wednesday, some importer will data were expected from the United States such as the Jolts job report, Powell's speech again and the ADP Non farm which was later released.

For the interest rates, The Chair Jerome Powell said the Federal Reserve is likely to lift interest rates higher and potentially faster than previously anticipated with inflation persisting, an unexpectedly aggressive posture following last months step down in the pace of hikes.

The remarks, coming in testimony before Congress on Tuesday, opened the door to officials lifting the Feds benchmark lending rate by a half percentage point at the next meeting if upcoming reports on jobs and prices show rate hikes have done little to cool the economy.

“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell told the Senate Banking Committee. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”

INDICES

The Dow closed 574 points or 1.7% lower on Tuesday, while the S&P 500 and Nasdaq 100 lost 1.5% and 1.2%, respectively, after aggressive comments from Powell fueled sentiment. fears of a further rate hike. Powell warned that the central bank is ready to pick up the pace of tightening as the latest data has been stronger than expected in prepared testimony before the Senate Banking Committee.

He acknowledged that the terminal level of interest rates could be higher than previously anticipated. Meanwhile, the yield on the 2-year US Treasury note topped 5%, a level not seen since 2007. The market move came alongside a rebound in Treasury yields and a stronger dollar. , enough to drive investors away from technology and other assets. -growth actions. In corporate news, Meta Platforms lost 0.2% after reports that the tech firm was preparing to lay off thousands more employees.

COMMODITIES

WTI: WTI crude futures held below $78 a barrel on Wednesday after losing 3.6% in the previous session as Federal Reserve Chairman Jerome Powell warned the central bank would be prepared to move further. fast and that interest rates could rise further if the data warranted it, raising concerns of an imminent slowdown. OPEC Secretary General Haitham Al-Ghais also said slowing oil consumption in Europe and the United States could threaten the market, while Citigroup said global supply is ample and demand remains low, which adds to the bearish sentiment.

Meanwhile, investors continued to assess the prospects for demand in China, as the world's top crude importer rolled back strict Covid restrictions but set a modest growth target for this year. Elsewhere, Chevron Chief Executive Mike Wirth told a conference in Houston that the world is now more vulnerable to any unexpected supply disruptions as the reduction in Russian power flows came at a time of inventories. limited oil supply and supply changes.

FOREIGN EXCHANGE

AND IN: The Japanese yen depreciated by more than $137 per dollar in March, the lowest in almost three months, as aggressive rhetoric from Fed Chairman Powell highlighted the divergence in monetary policy between the Federal Reserve and the Bank of Japan. . Powell noted that the US central bank is likely to continue raising interest rates aggressively as recent economic data continues to support inflation expectations. By contrast, Bank of Japan gubernatorial candidate Ueda reiterated the importance of the bank's ultra-loose monetary policy stance. In a second parliamentary hearing for his confirmation process, Ueda asserted that the benefits of the BOJ stimulus outweigh the negative effects in the current economic scenario, as a tighter policy by the bank would hurt growth and would not address supply-driven inflation.

The BOJ kept its ultra-low interest rates and left its yield control policy unchanged at its January meeting. Chilean Peso : Operations of the dollar peso began yesterday very close to the floor of $786, undoubtedly driven by the rise in the dollar index yesterday that took it to the area of 105 and generated a great collapse in the commodities at a general level, taking copper below the area of $4 usd. On the other hand, a new constituent process has been reconfigured, this time with a panel of experts which are made up of members of political parties and which should bear fruit in a new vote that will take place at the end of the year in December. Undoubtedly, political uncertainty could again be present in the oscillations of the dollar and we hope not to see it again in the area of $1,000 pesos.

CRYPTO MARKET

Despite losing 5% in an hour last week, Bitcoin's subsequent lack of volatility is on every trader's mind. The question is whether that will change in the coming days. There are many potential catalysts, from macroeconomic data to exchange setups and more, but which one will win out and which direction will send the BTC price remains to be seen. After the sudden volatility on March 3 due to a combination of concerns from Silvergate Bank and margin requests from exchanges, the BTC/USD pair has remained eerily flat.

Powell's remarks before the US House of Representatives Committee on Financial Services, a classic source of market volatility, they could alter the general mood - at least briefly - based on their language regarding future economic policy. At stake, in particular, are interest rates, with the next Fed rate hike decision still two weeks away.“ Expecting Bitcoin volatility to pick up mid-next week during Powell's testimony”