UAE Business: Fed remains focused on inflation, more rate hikes seen – Gulf Digital News

UAE Business: Fed remains focused on inflation, more rate hikes seen – Gulf Digital News

Market players are still in the process of digesting the message from the Federal Reserve, which sent the US markets lower once again yesterday.

The markets expected the decision of an interest rate hike by 75 basis points, and there was no element of surprise. However, it was Jerome Powell’s speech that brought large whipsaws to the US equity markets.

The Fed made it clear once again that they are determined to do whatever it takes to control inflation. Market players should not make any mistake in thinking that future interest rate hikes will not be of the same magnitude, especially the one in November.

It is pretty much a done deal that the Fed will increase the rate by another 75 basis points in November and 50 basis points in December.

The reason that US stock is under pressure is that traders believe that the possibility of a recession taking place in the US is strongly on the cards. In fact, many believe that the Fed is actually looking for a recession, given how aggressive they are with their monetary policy. However, the Fed did say last night that their monetary policy is very much determined by the economic numbers. But at the