Despite the Fed’s decision to continue raising interest rates, it did suggest rates were nearing their peak sooner than previously expected.
Monique Wong, Head of Multi Asset Portfolio Management at Coutts, explained: “The Fed Chairman Jerome Powell wouldn’t be drawn into a discussion around rate cuts. But the language used around rate rises was softer and there was an acknowledgement of the risks that tighter bank lending standards would eventually mean for the economy.”
The American central bank acknowledged recent bank sector stress, but showed confidence in the sector’s resilience, and it still wants to bring inflation down to its target of 2%. The same objective is shared this side of the Atlantic, although is proving trickier as the UK’s February inflation print announced earlier this week showed rising costs were accelerating again.
Year-on-year UK inflation for February came in at 10.4%, up from 10.1% the previous month. This was after the figure fell over the three previous months.