The First Slice for Thursday, March 9, 2023

U.S. stock markets ended Wednesday’s trading session mixed, attempting to recover from Tuesday’s broad-based selloff. The selloff was triggered by comments from Federal Reserve Chairman Jerome Powell suggesting more interest rate hikes than investors were expecting may be necessary to tame inflation.

  • The Dow fell -58.06 or -0.18%
  • The S&P 500 gained +5.64 or +0.14%
  • The Nasdaq rose +45.67 or +0.40%

Investors tuned in for the second day of Federal Reserve Chair Jerome Powell’s semiannual monetary policy testimony to Congress on Wednesday, where he said the central bank has yet to decide how large an interest rate hike to impose at its next meeting in two weeks.

The testimony comes as strong labor market data and a rise in inflation in January, have some speculating the Fed may move to raise interest rates at its upcoming meeting, although Powell tempered expectations.

“We have not decided on the size of adjustment that we would make to the [interest] rate,” Powell told the House Financial Services panel on Wednesday.

The central bank is scheduled to meet on March 17-18 to consider whether to raise interest rates, after having left rates unchanged since December.

Meanwhile, U.S. private payrolls rose by 242,000 in February, according to the payroll services firm ADP on Wednesday. That’s up from a revised 119,000 in the prior month and well above economists’ expectations of a 205,000 gain.

In other economic data, the U.S. trade deficit widened by 1.6% to $68.3 billion in January. U.S. imports rose 3% to $325.8 billion in January, while exports were up 3.4% to $257.5 billion.

The strong labor market data and rise in inflation have prompted many to speculate whether the Fed may move to raise interest rates at its meeting later this month. However, Powell indicated that the central bank will take a measured approach in assessing whether it should act.

Powell added that the Fed’s decisions will depend on a variety of factors, such as how well the economy is responding to recent fiscal stimulus, the strength of the job market, and inflation.

As the Fed considers its decision, investors will continue to pay close attention to the central bank’s assessment of the economic data and whether the Fed will decide to raise interest rates later this month……..Click here to read the source article[read more]

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