2023-08-16 20:31:33
Wall Street indices closed lower, on Wednesday, following the minutes of the last meeting of the Federal Reserve (the US central bank) showed that bank officials were divided over the need to continue raising interest rates. The minutes of the July central meeting showed that most policy makers still give priority to fighting inflation, which raises uncertainty in the markets regarding the path of interest rates.
The Standard & Poor’s 500 index fell by 33.62 points, or 0.76 percent, to end trading at 4404.24 points.
The Nasdaq Composite Index fell 156.59 points, or 1.15 percent, to 13,474.45 points, while the Dow Jones Industrial Average fell 179.86 points, or 0.51 percent, to 34,766.53 points.
Central meeting minutes
Minutes of the Fed’s July 25-26 meeting showed bank officials were divided over the need for further interest rate hikes. According to the minutes, “some participants” pointed to the risks to the economy as a result of raising interest rates dramatically, while “most” policy makers continued to give priority to fighting inflation.
“The participants remained determined in their commitment to reduce inflation to the target rate of two percent,” the minutes said.
During the meeting, the policy makers of the Federal Open Market Committee unanimously agreed to raise the key overnight interest rate to a range between 5.25 and 5.50 percent.
The minutes added, “Most of the participants continued to see increasing significant risks of inflation that may require further monetary tightening.”
However, voices warning of the effects of continued monetary tightening seem to have played a more prominent role in the discussion at last month’s policy meeting, an indication of the broadening of this trend at the Federal Reserve as policymakers assess signs that inflation is declining and the potential damage to jobs. and economic growth if interest rates rise too high.
Two of the participants, for example, called for keeping interest rates unchanged in July.
In general, the minutes said that Fed policymakers agreed that the level of uncertainty remains high and that decisions regarding future interest rates will depend on the “total” data received in the “coming months to help illustrate the extent to which inflation continues to slow.”
The July meeting was held ahead of data showing that key price measures have fallen this summer, along with fewer new jobs.
Corporate earnings
Meanwhile, the corporate earnings season continues, as H&R Block rose 6.86% and the Kava restaurant chain 2.09%, on the back of stronger-than-expected quarterly reports. Meanwhile, Target rose 6.36%, following strong quarterly earnings.
Bank stocks fell, including JPMorgan, Wells Fago and Bank of America following Fitch warned Tuesday that it may have to downgrade the credit rating of dozens of banks. This comes as the latest challenge facing the sector, following Moody’s decision last week to downgrade 10 banks while putting others on a watchlist.
In addition, economic news from China affected investor confidence. Both retail sales and industrial production grew less than economists expected, according to data released Tuesday. The Chinese central bank also cut interest rates. (agencies)
1692218791
#Wall #Street #closed #publication #Reserve #minutes
