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Wall Street warmly welcomed comments from the Fed boss

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The New York Stock Exchange while waiting for Powell.

Photo: AFP / VNA / CVN

Its flagship index, the Dow Jones Industrial Average, rose 2.50% to close at 25,366.43 points, recording its best session occasionally since March. Nasdaq, with strong color technology, took 2.95% to complete at 7,291.59 points. The S & P 500 index rose 2.30% to end at 2,743.78 points. In front of the New York Economic Club, the Fed boss is only "magic words"The market is waiting," said Gregori Volokhine of Meeschaert Financial Services.

Investors were troubled when Jerome Powell estimated in early October that the Fed was "still very far" from the "neutral" level it wanted, which encouraged growth without giving price increases. This statement has largely contributed to triggering a period of strong turmoil on Wall Street. Believe Wednesday, November 28 that prices are "below" a neutral level, "He shows that we are close to the end of the cycle of rising interest rates", said Peter Cardillo of Spartan Capital Securities.We can still expect new increases in December, but maybe only one or two next year "where market observers have anticipated up to now two to three increases, he said.

Enough to convince investors on Wall Street, who fear for several months the rate hike is too fast. The sudden tightening of US monetary policy can, in their view, slow growth by making very expensive loans for individuals and businesses. "The fact that Powell repeated that monetary policy will be decided based on economic data has also convinced investors", according to Cardillo: this shows that institutions will adjust their decisions if the economy slows down.

However, Powell comments on Wednesday, November 28, no "Not careful as the market thinks," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. The Fed boss really feels that prices are just below "of approximate range " where they can be considered neutral, he said.

If we consider this range currently between 2.5% and 3.5%, "there are still three improvements before reaching the middle "he said. On the bond market, the 10-year US debt level was stable at 21.15 GMT to 3.056%, against 3.057% at the close of Tuesday, and 30 years rose to 3.345%, against 3.319% the day before.


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