June 17th 2022, 6:10:52 pm
(about a year ago)
💲The most significant US interest rate hike in 30 years🤑
North American equities rallied today, snapping a five-day losing streak that wiped out 10% of the S&P500, after the US Federal Reserve announced a sizable 0.75% to the central bank policy rate increase, which is the biggest since 1994, as a way of tightening monetary policy to combat hot inflation and to bring back to the 2% target. The interest rate is not standing at 1.75%. S&P 500, Nasdaq and Canada’s S&P/TSX added 1.46%, 2.50%, and 0.32% respectively.
US Central bank’s officials were on set to increase the rate by 0.5% in this meeting, but the May inflation report showed an 8.3% year-over-year increase in the price level, the result of which was a more sizable move by the Fed. Federal Reserve’s Chair, Jerome Powell, also noted that another 0.5% or 0.75% increase is likely in their July meeting. The markets are now pricing in the short-term interest rate of around 3.5% based on the US Treasury yields, and Powell mentioned that the policy rate could hit 3.4% by the end of the year.
US dollar and oil prices declined subsequently. West Texas Intermediate dropped 2.5% to 116 a barrel. US dollar stands at 1.29 against the Canadian dollar.
The Crypto market rout continued with Bitcoin falling below 22,000, the lowest level since two years ago.