📊Daily Summary - Hawkish Fed raises rates and signals more. Dollar gains while gold falls

📊 Macroeconomics & Fed Decision

• The Federal Reserve raised interest rates by 25 bps to 4%, marking the first hike since 2023, a move in line with market consensus. Following the decision, the US dollar and bond yields advanced.
• Wall Street futures reacted moderately—about an hour after the decision, they are giving back some earlier gains.
• Nasdaq 100 futures are down 0.05%, S&P 500 futures are down 0.51%, hitting their lowest levels since August 3, and Dow Jones Industrial Average futures are down 1.2%
• The median Fed interest rate forecast for the end of 2026 rose to 4.125% from the previous 3.75%, suggesting the possibility of one more rate hike. As many as 16 out of 19 FOMC members project at least one additional rate hike in 2026. The market is starting to price in as many as 2 moves this year
• The Fed revised its US GDP growth forecast for 2026 upward to 2.3% from 2.2% and lowered its projected unemployment rate to 4.1% from 4.3%.
• The 2026 PCE inflation forecast increased to 3.7% from 3.6%, while core PCE inflation was revised up to 3.4% from 3.3%.
• In the Fed's view, the US economy is growing at a solid pace, productivity is strong, and consumer spending and capital expenditures demonstrate high resilience.
• The statement maintained a hawkish tone. The reference to inflationary pressures caused by supply-side impacts of wars was removed. A phrase regarding actions supporting a more timely return to the target was added, which, according to Deutsche Bank's chief US economist, plays a key role in interpreting the central bank's stance.
• Fed Chair Kevin Warsh noted that the economy remains resilient, the labor market is near full employment, and financial conditions are not distinctly restrictive, leaving room for further efforts to combat inflation.
• Warsh emphasized that inflation has remained too high for too long, summer readings did not bring sufficient improvement, and numerous price categories continue to rise above 3% annually. The FOMC lacks confidence regarding a sustained return of core inflation to the 2% target, so decisions remain data-dependent without rigid forward guidance.
• The Fed Chairman linked the rise in bond yields to a strong economy, competition for capital (an investment boom), and geopolitical tensions, while also pointing to the global nature of inflation and the impact of AI development on the economy.
• US macroeconomic indicators surpassed expectations: retail sales rose 1.2% MoM (forecast: 0.8%, following a 0.5% drop in July), while core sales surged by 1.4% MoM (forecast: 0.4%), marking the strongest reading since 2024.

📈 Stock Markets & Companies

• As of 9:10 PM CET, equity markets show mixed sentiment: S&P 500 is down about 0.5% (+0.12% on a weekly basis), DAX falls 0.15% (+0.70% on a weekly basis). 
• Shares of JB Hunt Transport Services (JBHT.US) dropped by over 13% following a warning from CFO Brad Delco regarding a projected 5-10% QoQ decline in Q3 profit, which weighed on the entire transportation sector.
• The Turkish stock market experienced a crash. The main index fell 4% due to issues related to fund withdrawal delays.

🛢️ Commodities

• As of 9:10 PM CET, commodity prices are as follows: Gold is down 1.20%. Silver drops 0.61%, Brent Crude falls over 2%.
• Decline in oil prices stems from prospects of situation stabilization in the Bab al-Mandab Strait and reports that Saudi Aramco is expected to restore half of the East-West pipeline capacity within a few days
• Prior to the Fed statement release, gold rose 1.2%, reaching the 4345 USD/oz area driven by discounting alternative scenarios and profit-taking on short positions. Following the decision, gains were erased, and the metal dropped sharply from 4365 USD to 4300 USD per ounce.

💱 Currencies

• The EURUSD pair became the main loser of the session, suffering a sharp plunge below the 1.15 level.
• Strong gains are also observed on USDJPY, where the 156 level is being tested

🌍 Geopolitics

• The President of the European Commission supported a plan for Canada to achieve EU associate member status, responding to the cooling diplomatic and trade relations between Canada and the United States under Donald Trump's administration.
• Senator Blumenthal called for immediate oversight of AI, warning against losing control over the technology. The Trump administration maintains that outpacing China in the tech race remains a top priority.
• The French government decided to extend fuel aid relief for sectors most affected by rising energy prices caused by the Middle East conflict.