Dow hits fresh record after US Fed chair signals possible rate cut
NEW YORK – Wall Street rallied on Aug 22 after US Federal Reserve vhair Jerome Powell opened the door to lowering interest rates – with the Dow closing at a fresh record for the first time since December.
The Dow Jones Industrial Average added 1.9 per cent to 45,631.74, while the broad-based S&P 500 advanced 1.5 per cent to 6,466.91.
The tech-heavy Nasdaq Composite Index climbed 1.9 per cent too to 21,496.54.
All three indexes were bolstered after Mr Powell flagged the risks of higher inflation and a weakening jobs market at
a central bankers conference
in Jackson Hole, Wyoming.
He noted that challenges to employment are growing and could materialise quickly in the form of layoffs.
“The baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” he said, opening the door to a rate cut.
This fuelled expectations that the reduction could happen in the Fed’s September meeting.
Mr Angelo Kourkafas, of Edward Jones, told AFP that “a September cut is not necessarily a done deal,” but Mr Powell’s comments indicated the Fed is prepared to move rates lower if inflation remained relatively benign.
On Aug 22, Fitch Ratings also affirmed the United States’ credit rating at “AA+“ with a stable outlook.
But it warned that “high fiscal deficits, a substantial interest burden, and high and rising government debt levels” constrain the rating. AFP