Powell Keeps Interest Rate Hikes On The Table, Curbs Market Excitement: Tech Falls, Dollar Recovers
Portfolio Pulse from Piero Cingari
The Federal Reserve has raised interest rates by 25 basis points, the highest level since February 2001, as part of its efforts to bring inflation to a 2% objective. Fed Chair Jerome Powell stated that the full impact of policy tightening is yet to be experienced and that the Fed will maintain a data-dependent approach. Powell also expressed concern over the core inflation rate in June, at 4.8%, significantly above the Fed’s mandate. The stock market erased post-Fed statement gains, with the SPDR S&P 500 ETF Trust (NYSE:SPY) dropping 0.4% during the session and the SPDR Gold Trust ETF (NYSE:GLD) rising by 0.5% for the session.
July 26, 2023 | 7:43 pm
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POSITIVE IMPACT
The SPDR Gold Trust ETF (NYSE:GLD) rose by 0.5% for the session following the Fed's announcement of an interest rate hike.
The interest rate hike by the Federal Reserve has led to an increase in the value of GLD. This is because gold is often seen as a safe haven asset during times of economic uncertainty, and higher interest rates can create such uncertainty.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The SPDR S&P 500 ETF Trust (NYSE:SPY) dropped 0.4% during the session following the Fed's announcement of an interest rate hike.
The interest rate hike by the Federal Reserve has led to a decrease in the value of SPY. This is because higher interest rates can lead to higher borrowing costs for companies, which can negatively impact their profitability and thus their stock prices.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100