NextGen Day

Investors and experts are watching talks by Fed officials, notably Chairman Jerome Powell, as global markets strive to rebalance amid uncertainty caused by the US Federal Reserve’s (Fed) indications for earlier interest rate hikes.

While the Fed’s hawkish approach and expectations of a rate hike in March remained to be priced in the stock markets, Powell’s remarks on Monday had a beneficial influence on the stock markets.

Powell stated that the bank will use its measures to support the economy and a healthy job market while also preventing persistently high inflation.

He stated that rising economic activity has resulted in permanent supply and demand mismatches and bottlenecks, which has resulted in high inflation, but that the bank is committed to achieving maximum employment and price stability goals.

While Powell’s words helped to offset a major portion of the New York stock market’s losses of up to 2%, the Nasdaq index broke its four-day losing trend on Monday.

While the speeches of Kansas City Fed President Esther George and St. Louis Fed President James Bullard, whose hawkish position has come to the fore in recent months, are at the forefront of the agenda on Tuesday, the statements will be scrutinized for signals about the future of monetary policy.

Expectations that the Fed would raise interest rates for the first time in March with a 90% probability remain unchanged.

The 10-year bond yield in the United States stabilized at 1.77 percent on Monday, after increasing to 1.80 percent, the highest level since January 2020, as a result of these developments.

After starting the day with a severe sell-off, the New York stock market regained most of its losses near the end of the day on Monday.

The S&P 500 index was down 0.14 percent, the Dow Jones was down 0.45 percent, and the Nasdaq was up 0.05 percent.

Europe’s stock markets, which were closed on Monday before Powell’s remarks, ended the day with a loss.

Investors will be watching Christine Lagarde’s speech as president of the European Central Bank (ECB) on Tuesday.

While European indices were higher on Tuesday, the FTSE 100 index fell 0.53 percent in the UK, the DAX 30 index fell 1.13 percent in Germany, and the CAC 40 index fell 1.44 percent in France.

While Asian financial markets showed mixed results on Tuesday, the rapid expansion of the Covid-19 epidemic remains a risk factor.

The continuation of the region’s record number of cases and measures raises concerns about the region’s economic recovery.

As a result of these developments, China’s Shanghai Composite index fell 0.50 percent, Japan’s Nikkei 225 index fell 1%, and South Korea’s Kospi index fell 0.06 percent, while Hong Kong’s Hang Seng index rose 0.17 percent.

The BIST 100 index in Turkiye, which gained 0.58 percent on Monday, continued to rise for the sixth trading day in a straight, closing at 2,045.16 points.

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