Stocks surge, dollar slips as peak Fed bets mount: Markets wrap

The moves come after the Fed raised the federal funds rate to a 22-year high and while it signaled further hikes would be data dependent, many investors reckon it’s done hiking interest rates. They have trimmed bets on more increases this year, as Fed Chair Jerome Powell pointed to signs that higher borrowing costs are working to curb price pressures.

Meanwhile, a predicted 25-basis-point rate rise later Thursday from the European Central Bank could be one of its last moves this cycle.

Pooja Kumra, senior European rates strategist at Toronto Dominion Bank, said Fed hawkishness had been “dialed down a notch.” While upcoming jobs and inflation figures would be crucial for the September meeting, “the current disinflation trend supports a pause rather than a hike,” she added.

The conviction over peaking US and European rates coincides with a robust earnings season. So far, more than half of all companies have beat analyst estimates and today stands to be the busiest of the second-quarter calendar.

Source: Moneyweb