Global stocks fall as the dollar rises on US Fed comments

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European stocks fall for fourth straight session, while the US Fed chair walks back the likelihood of a July rate cut

The New York Stock Exchange. Picture: REUTERS/BRENDAN McDERMID

Powell said the central bank is “insulated from short-term political pressures”, but he said he and his colleagues are currently grappling with whether uncertainties around US tariffs, Washington’s conflict with trading partners, and tame inflation require a rate cut. The dollar rebounded and gold prices retreated after Powell’s comments, which pulled the dollar up from three-month lows against a basket of other currencies in the previous session at 95.843. It was up 0.1% at 96.273.

However, not all see the comments as evidence of a policy U-turn. Richard Dias, multi-asset strategist at Pictet Asset Management, said the Fed had effectively backed itself into a corner, making a cut in July or September highly likely. European bond yields remained pinned to all-time lows, unmoved by the apparent shift in tone from the Fed. Germany’s 10-year benchmark bond yield held at about -0.32%. And with the seemingly insatiable bid for bonds continuing, Austria opened books on a 100-year bond, a tap of its existing September 2117.

 

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