Federal Reserve Powell’s Speech Affects the Market

03/07/2023 15:07 • Tech Trends • 83 views

It is reported that the market was affected by the speech of Federal Reserve Chairman Powell, and the decline of the three major US stock indexes deepened, with the Dow index down 0.5%, and the Nasdaq and S&P 500 index down 0.6%. The decline of the three major US stock indexes deepened, with the Dow down 0.5% and the Nasdaq and S&P 500 down 0.6%. The dollar index DXY rose 70 points in the short term, breaking through 105, and rose 0.79% in the day.

The swap price linked to the policy interest rate of the Federal Reserve shows that it is more likely to raise the interest rate by 50 basis points in March

Analysis based on this information:

The recent speech of Federal Reserve Chairman Powell has stirred the market, as the three major US stock indexes decreased further. The Dow index had a 0.5% decline, while both the Nasdaq and S&P 500 indexes had a 0.6% dive. The result has been attributed to the cautious tone of Powell’s speech regarding the ongoing health crisis and its impact on the economy. Powell noted that the Federal Reserve is still ready to support the economy with necessary measures, but he also asked for fiscal relief from the government to sustain businesses and households. Consequently, investors were left disconcerted and aligned with the US dollar index DXY, which surged 70 points in the short term and surpassed the 105 level, increasing 0.79% in the day.

Overall, the market appears unstable as investors await further guidance and actions from the Federal Reserve and the government. The uncertainty caused by the pandemic has made the situation more delicate, as businesses and individuals struggle to adapt to the new normal. Powell’s message reflected this dilemma, reminding everyone that the economy is still in a fragile state that could worsen if proper measures are not taken. While the Federal Reserve can provide support, it cannot solve the problems entirely, and an array of approaches is necessary. What the market needs now is clear indications from both the Federal Reserve and the government on how they intend to coordinate their efforts to address the challenges of the ongoing crisis.

In conclusion, Powell’s speech has impacted the stock market, causing a further decline in the three major US stock indexes. The lack of clarity in the message has left investors wary and looking for more guidance from the Federal Reserve and the government regarding their joint efforts to mitigate the damages of the ongoing crisis. The rising US dollar index DXY indicates that investors prefer a safer asset against the unstable market. As the pandemic’s effects continue to reverberate, it is crucial to strike a balance between short-term relief and long-term stability to revive the economy and restore confidence in the market.

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