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The US Federal Reserve cut interest rates for the second time, this time by 25 bps, bringing it to 4.5%-4.75%, it said in a press release yesterday. The decision comes just a day after Donald Trump was voted president, with many investors now expecting a less certain path for monetary easing due to an anticipated rise in inflation when Trump begins to implement US tariffs and extend tax cuts.
The path ahead is uncertain, Powell says: Powell said he does not expect any “near-term” impact from the elections on monetary policy — but further down the line, nothing is set in stone. “We don’t know what the timing and substance of any policy changes will be,” Powell said. “We therefore don’t know what the effects on the economy would be, specifically whether and to what extent those policies would matter for the achievement of our goal variables: maximum employment and price stability.”
Powell left the door open for a potential policy pause during a press conference, refusing to rule anything out — though he committed to further rate cuts in the future, Reuters reports. The next meeting will take place on 17-18 December.
Market reax: The S&P 500 and Nasdaq both notched record highs, extending a rally that began in the wake of Trump’s reelection.
MARKETS THIS MORNING-
Asian markets are also rallying following the news, as investors brace for new stimulus measures in China during the final day of the National People Congress. Over on Wall Street, futures indicate another strong open as stocks extend their rally.
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ADX |
9,466 |
+0.44% (YTD: -1.2%) |
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DFM |
4,644 |
+0.6% (YTD: +14.4%) |
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Nasdaq Dubai UAE20 |
3,866 |
+0.1% (YTD: +0.6%) |
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USD : AED CBUAE |
Buy 3.67 |
Sell 3.67 |
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EIBOR |
4.6% o/n |
4.3% 1 yr |
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TASI |
12,131 |
+0.3% (YTD: +1.4%) |
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EGX30 |
31,268 |
+0.7% (YTD: 25.6%) |
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S&P 500 |
5,973 |
+0.7% (YTD: +25.2%) |
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FTSE 100 |
8,141 |
-0.3% (YTD: 5.3%) |
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Euro Stoxx 50 |
4,852 |
+1.1% (YTD: +7.3%) |
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Brent crude |
USD 75.38 |
-0.3% |
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Natural gas (Nymex) |
USD 2.7 |
+0.3% |
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Gold |
USD 2,709.1 |
+0.1% |
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BTC |
USD 75,932.4 |
+0.2% (YTD: +79.7%) |
THE CLOSING BELL-
The ADX rose 0.4% yesterday on turnover of AED 1.7 bn. The index is down 1.2% YTD.
In the green: Invictus Investment (+4.4%), Abu Dhabi Holding (+3.8%) and Agility Global (+2.3%).
In the red: Abu Dhabi National Takaful Company (-9.9%), AL Khaleej Investment (-7.6%) and Aram Group (-5.8%).
Over on the DFM, the index rose 0.6% on turnover of AED 452.9 mn. Meanwhile, Nasdaq Dubai closed up 0.6%.
