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Mar 22, 2018

The Wall Street Journal | Money on March 22,2018.

The Wall Street Journal
MoneyBeat

Powell Isn’t Shaking Things Up Yet

By Chelsey Dulaney
Morning MoneyBeat is the Journal’s pre-market primer. To receive the newsletter via email, click here.
Market Snap at 03/22/2018 08:15:39 AM ET
S&P 500 Futures -0.73%
2698.5
DJIA Futures -0.78%
24535
U.S. 10 Year 7/32
2.858%
WSJ Dollar Index -0.03%
83.51
Crude Oil -0.31%
$64.97
Gold 0.64%
$1335.80
Europe
Asia
FTSE 100 -0.95%
Nikkei 225 0.99%
DAX -1.14%
Hang Seng -1.09%
CAC 40 -1.15%
Shanghai -0.53%

Overnight Developments

  • Tech shares dragged on global markets overnight after the Federal Reserve lifted interest rates and ahead of an update from the Bank of England. S&P 500 futures pointed to an opening fall of 0.6%.
  • Meanwhile, the Stoxx Europe 600 fell 0.9%.
  • Earlier, the Nikkei Stock Average gained 1% as energy firms were boosted by a rise in oil futures.
  • The Breakfast Briefing

    The Federal Reserve's latest meeting should ease concerns that the central bank is shifting its approach under new chairman Jerome Powell.
    The Fed lifted rates a quarter-percentage point at the close of its two-day meeting Wednesday and issued a new policy statement and updated economist forecasts. Mr. Powell also held his first press conference as chairman.
    Among the changes: the Fed penciled in another rate increase for next year and raised its projection for where rates will sit in the long-term, suggesting a steeper path of tightening in the years ahead. But it also stuck to its forecast for three rate increases in 2018, while many investors had expected the Fed to project a fourth increase.
    Stock and bond markets wavered as investors digested the trove of new information before ending the day roughly where they had been before the Fed's decision.
    The S&P 500 rose as much as 0.9% immediately after the Fed announcement before falling into negative territory to end the day down 0.2%. The 10-year Treasury yield had a similarly erratic performance, ending the day at 2.90% after rising as high as 2.93% after the announcement.
    Analysts say the Fed’s decision leaves investors in familiar territory: while the central bank continues to lift rates amid stronger growth and inflation, it doesn’t yet see a reason to dramatically accelerate the path of tightening.
    “Powell has chosen continuity over a change in outlook,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.
    Mr. Ripley believes the Fed is still looking for evidence that inflation is firming and to see the impact rising trade tensions will have on the economy.
    “It is likely [Powell] is buying time until the June meeting before a fourth rate hike is crystalized into the policy forecast from the Fed,” he said.
    Is the Fed changing its approach to raising rates? Let the author know your thoughts at chelsey.dulaney@wsj.com.