Summary
The Federal Reserve decides to keep interest rates on hold, signaling a cautious approach amid persistent inflation concerns. While the decision was not unanimous, with two committee members dissenting, markets anticipate an 84% chance of a rate hike in December, along with two additional increases by mid-next year. Fed Chair Kevin Walsh emphasizes the need for more information before determining future policy actions.
In Australia, inflation remains a pressing issue, as highlighted by the recent Consumer Price Index release. Market expectations for rate hikes have increased, reflecting the ongoing economic challenges. The Australian market shows slight gains, with the ASX 200 closing at 8,847, despite underperformance in rate-sensitive sectors like consumer discretionary and real estate.
Commodity prices reflect ongoing geopolitical tensions, with oil prices rising due to conflicts in the Middle East. Brent crude futures settle at $115.32 per barrel, while gold futures decline slightly. Currency markets respond positively to the Fed's decision, with the Australian dollar trading just below 70.5 U.S. cents.
In the U.S. markets, share prices are stable as investors await key earnings reports from major companies. The Dow Jones, S&P 500, and NASDAQ show modest gains, while mixed movements in government bond yields follow the Fed's announcement. European markets remain subdued, affected by disappointing earnings and rising oil prices, as investors prepare for the European Central Bank's upcoming interest rate decision.
Show Notes
Wall Street was little changed overnight after the Federal Reserve held interest rates steady, but with further hikes still on the cards, how long will the pause last? Here at home, hotter-than-expected inflation has strengthened expectations of another RBA rate hike, while the ASX is poised for a slightly stronger open. Plus, how today's gradual interest rate increases compare with the much sharper hikes of decades past. Join James Gruber, Equity Market Strategist and James Tao, Equity Market Commentator at CommSec, as they take you through all the key numbers. Check out our Market News page Follow us on: Instagram LinkedIn YouTube TikTok The content in this podcast is prepared, approved and distributed in Australia by Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814. The information does not take into account your objectives, financial situation or needs. Consider the appropriateness of the information before acting and if necessary, seek appropriate professional advice. See omnystudio.com/listener for privacy information.
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