(Washington Insider Magazine)-BEIJING (Transatlantic Today) — After the Federal Reserve stated that U.S. inflation is extremely high despite robust rate hikes, indicating support for more hikes, Wall Street futures and global stock markets mainly fell on Thursday.
Tokyo, London, Hong Kong, and Shanghai all declined. Frankfurt started off better. Oil costs grew marginally.
Inflation is “unacceptably high,” according to notes from the Fed board’s July 26–27 meeting that were published on Wednesday “despite indications that US economic growth is slowing. Members of the board observed “little evidence” that inflation pressures are easing.
Investors are concerned that this year’s dramatic rate increases implemented by central and Fed banks in Asia and Europe to combat inflation that is at multi-decade highs will halt global economic development.
According to Venkateswaran Lavanya of Mizuho Bank, the Fed notes increased the likelihood of further tightening, but some investors worry about excessive tightening slowing GDP.
Frankfurt’s DAX rose 0.3% to 13,672.70 during early trading, while London’s FTSE 100 fell 0.2% to 7,498.98. According to ABC NEWS, the CAC 40 in Paris increased 0.2% to $6,539.60.
Futures for the Dow Jones Industrial Average and the benchmark S&P 500 index on Wall Street were down 0.3%.
In Asia, the Shanghai Composite Index dropped 0.5% to 3,277.54 while the Nikkei 225 in Tokyo dropped 1% to 28,942.14. Hong Kong’s Hang Seng dropped 0.8% to 19,763.91 points.
The Kospi in Seoul dropped 0.3% to 2,508.05. Sydney’s S&P-ASX 200 was down 0.2% at 7,112.80.
The Sensex in India dropped 0.3% to 60,064.94. Jakarta and Singapore gained while Bangkok and New Zealand fell.
The S&P 500 fell 0.7% on Wall Street on Wednesday, knocking out the week’s profits. The index then fell 0.1% since Monday.
The Nasdaq fell 1.3% and the Dow fell 0.5%.
The Fed memo stated clearly that the board intends to keep raising rates, but it offered no mention of when or by how much.
The benchmark lending rate has increased by 0.75 percentage points, or triple its average margin, twice this year by the U.S. central bank. Forecasters predict a raise of the same magnitude could be made at the September meeting, though the chance has decreased as evidence of the worsening economy has emerged.
Contrary to forecasts, retail sales remained unchanged in July compared to the previous month, according to the Commerce Department. High inflation, according to retailers, will deter customers from spending money on non-essentials.
After reporting an almost 90% decline in second quarter profits, the retail giant Target saw a 2.7% decline. Children’s Place, a retailer of clothing and accessories for kids, experienced an 11% decline after disclosing a surprise loss as a result of supply issues and inflationary pressure.
Stocks in the communications and technology industries decreased as well.
On the New York Mercantile Exchange’s computerized trading platform, benchmark U.S. crude increased 18 cents to $88.29 per barrel in the energy sector. On Wednesday, it increased $1.58 to $88.11. The benchmark price for international trade, Brent crude, increased 37 cents to $94.02 per barrel in London. The previous session saw a $1.31 increase to $93.65.
From 135.05 yen on Wednesday, the dollar increased to 135.28 yen. The euro decreased slightly from $1.0169 to $1.0163.