27 August 2018
Bassanese Bites: Friendly Fed – Week beginning: 27 August 2018
The key global highlight last week was the fact that Wall Street managed to touch new record highs on the back of reassuring comments from the Federal Reserve. Indeed, the S&P 500 lifted 0.9% last week, helped by a 0.6% rise on Friday following a speech by Fed chair Jerome Powell. Powell indicated the Fed is not wedded to any particular view on what the “natural” rate of unemployment might be, or even the “neutral” policy rate – but rather will simply continue to lift rates gradually to its current “rough assessment of neutral” as long as “strong growth in incomes and jobs continues.” Importantly, Powell indicated that “while inflation has recently moved up near 2 percent, we have seen no clear sign of an acceleration above 2 percent, and there does not seem to be an elevated risk of overheating.” (my underlining).
< Back to Blog