The Fed once again reduces its rate hike
📍The first week of February has been marked by numerous key data: inflation, PMI, presentation of annual results… but all eyes were on the Central Banks, especially the Fed and the ECB.
📍Powell announced on Wednesday that the Fed will raise 25 basis points, great news for the markets after the 50–75-point hikes made throughout 2022. As for the ECB (and the BoE), a similar hike to the last meeting in December (50 basis points) was announced.
📍Two moves that had already been predicted by the markets, and which have resulted in a strong increase in the stock market (mainly technology stocks).
📍A large part of the market believes that the Fed will raise rates by more than 25 basis points (thanks to the correct evolution of inflation and the labor market) and will then keep rates stable throughout the year (there may even be a lowering in the last quarter of the year).
📍As for Europe, Lagarde has made it clear that although inflation has slowed in recent months, they still have a long way to go to bring inflation to the 2% target. As such, markets are projecting another 50-basis point hike at the next ECB meeting.