October 10th 2024, 7:27:47 am
(about a few seconds ago)
US central bank’s rate hike on the markets’ radar
Share On
US central bank’s rate hike on the markets’ radar
On a dizzying roller-coaster day, North American equities managed to end in the green territory as markets awaiting the US Federal Reserve’s decision on Wednesday. US S&P 500 and tech-heavy Nasdaq added 0.48% and 0.22%, respectively, and Canada’s S&P/TSX composite gained 1.11%. Shares of commodity producers and banks led the gain while tech companies continued their sluggish trend. Markets are still concerned about persistent inflation and the risks of higher interest rates curbing global growth. US central bank chair Jerome Powell and his colleagues are expected to meet on Wednesday and raise interest rates by 50 basis points to underline that they’re determined to lift the rates to 2.5% by the end of the year. This move is an effort to control inflation which is running above the 2% target of the United States, but it is not clear if the rate hikes will be enough to tame the high inflation. While US officials hope to achieve their soft-landing by not raising the rates too high, some analysts believe the rates should go as high as 5%, which puts the US and global economy into forced recession, raising living costs for consumers with record-high household debts.