Wall Street traded cautiously on Monday, so the stock indexes remained almost unchanged, as investors are not willing to take risks ahead of the US central bank’s report on the state of the economy.
At the beginning of trading, stock market prices rose significantly. But later, the enthusiasm waned, so the indices lost their initial gains.
Investors are unwilling to take too much risk because all the latest data show that inflation in the United States of America is still at high levels, which means that the American central bank, the Federal Reserve, will continue to raise interest rates.
That’s why investors are cautious ahead of Fed President Jerome Powell’s report to Congress on the state of the economy.
With inflation still high and the economy growing faster than expected. Hence, the market has raised expectations for the Fed’s interest rates, which are should raise to a range of 5.5 to 5.75 percent by September. In contrast, interest rates now range between 4.5 and 4.75 percent.
Director at BCA Research, Irene Tunkel, said that the market is cautious because this week it will be clarified what is going on with the American economy, given that Powell will comment on the situation and that the February employment report in the US will be published at the end of the week. Investors are worried about economic indicators because they don’t know what the Fed will do. But, all roads lead to the Fed.
And on most European stock exchanges, share prices rose. The London FTSE index weakened by 0.22 percent to 7,929 points, while the Frankfurt DAX rose by 0.48 percent to 15,653 points and the Paris CAC by 0.34 percent to 7,373 points.
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