Technology stocks pushed US stocks higher as Federal Reserve officials reiterate their intention to lower the inflation rate.
The “Standard & Poor’s 500” index rose by 0.6% – despite the pressures on the stocks of financial institutions – while the “Nasdaq 100” index, which gives a higher relative weight to technology stocks, advanced by 0.9%, to move forward in its bullish wave. There was little change in the prices of treasury bonds, and the dollar recorded a weaker performance once morest the major currencies.
The gains come as market watchers digested a raft of Fed comments suggesting more monetary austerity is needed, even following the collapse of three US banks earlier this month. Suzanne Collins, President of the Federal Reserve Bank of Boston, said that monetary policy tightening is needed.
Richmond Fed President Thomas Barkin said the central bank might raise interest rates if inflation risks persist. Minneapolis Federal Reserve Bank President Neel Kashkari said he was committed to returning inflation to 2% and that it was not yet fully clear what the impact of the financial system turmoil would be.
“The Fed’s job is made tougher by cracks in the banking system,” said Jim Beard, chief investment officer at Plante Moran Financial Advisors. “Recession risks remain in focus given the Fed’s track record. Historically, trying to tighten monetary policy is setting the economy up for a soft landing.”
