Fed chair Powell signals stimulus tapering could start this year, but warns of Delta variant risks – business live
Rolling coverage of the latest economic and financial news
- Wall Street at record highs as Powell soothes investors
- Fed chair Powell says could be appropriate to start tapering this year…
- …but also points to risks from Delta variant
Earlier:
- China’s 996 overtime policy illegal
- China proposes clampdown on algorithms
- Algorithms must comply with law, social ethics and fairness…
- No disrupting public order, unfair pricing, or harming minors
- WSJ: China may ban companies with large amounts of sensitive consumer data from overseas floats
Stocks have pushed higher in London too, where the blue-chip FTSE 100 index has just closed 23 points higher at 7148 points, a gain of 0.3% today.
Mining stocks finished on top, with the weaker dollar continuing to push up commodity prices.
Additionally, the reinforcement of the message that tapering is not tightening, and merely a reflection of the improvement in the economy has helped reassure markets that the central bank is not going to be hasty in removing accommodation.
This message has helped deliver the FTSE100 to a positive week, with basic resources leading the gainers, with the likes of Anglo American, BHP and BP leading the gainers on the back of firmer commodity prices.
Multi-Asset Portfolio Manager at Janus Henderson Investors Oliver Blackbourn, has a good take on Jerome Powell’s speech too:
Chair Powell gave little new detail in his headlining act at the annual Jackson Hole Symposium. Like a music festival headline act, there was a mix of old favourites (transitory inflation, still a way to go in unemployment) and some new material (tapering by Christmas). Ultimately, Powell appeared to give the fans what they wanted judging by the market’s reaction. Markets appear to be buying into the dovish taper for the time being.
Powell was clear in his comments that the ‘substantial further progress’ that he has been waiting for on inflation has now been met, even if there is still some more to go on unemployment. Therefore, he appears happy to get on with tapering this year, a timetable that the market also appears to have settled on given the number of Fed meetings left in 2021. The question that was not addressed was how quickly the Fed will reduce asset purchases.
