The press conference of FED chairman Jerome Powell has just ended and its course was in line with market expectations.
Here are they key takeaways from the opening statement:
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile app- Omicron variant is a risk but we still see rapid growth
- Demand remains very strong, buoyed by healthy household balance sheets
- Economic growth is still rapid
- Recent improvement in labor market has narrowed difference across classes and races
- FED thinks labor market will continue to improve
- The pandemic has pushed people out of the labor market, unclear when they will return
- Bottlenecks have been longer and stronger than anticipated
- Inflation likely to run above 2% goal "well into next year"
- Price increases have broadened while wages have also risen briskly
- Central bank expects inflation to fall close to its goal next year
Below we present some key takeaways from the Q&A session:
- Interest rates will not increase until the tapping process is completed
- We are a long way for knowing what omicron will turn out to be
Powell seems to be quite hawkish. The EURUSD erased initial losses, and US indices are also continuing to rise.
US500 dropped after the release of the FOMC decision statement. However, index started to recover quickly and upward move accelerated as Powell's press began. Source: xStation5
EURUSD - initially currency pair fell, however buyers manage to quickly regain control and price is testing the 50 SMA (green line). Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
