Reconfirmation of pigeon position at the House hearing following the Senate
Dow index hits record high
Asian stock markets also rose on the 25th
▲ Dow index trend in New York stock market. 24th (local time) closing price 30,1961.86 Source Financial Times (FT)
Jerome Powell, chairman of the Federal Reserve System (Fed), cleared the dark clouds on the stock market. By dismissing concerns over inflation again, he expressed a strong commitment to stimulating the economy. At the assertion of Chairman Powell, the global stock market, which had fallen due to a surge in US Treasury yields, has succeeded in rebounding.
As of 2:10 pm on the 25th, the Korean KOSPI index shows 3084.70, a 3% increase from the previous day. The Nikkei 225 index in Japan rose 1.45%, and the Shanghai Composite index in China rose 1.07%, respectively. Chairman Powell’s remarks took over the rising trend of the US and Europe the day before.
The Dow index in the New York Stock Market rose 424.51 points (1.35%) compared to the previous trading day, closing at 31961.86, breaking an all-time high. The Dow index once crossed the 32,000 line during the week. The S&P 500 index rose 1.14%, and the technology stock-oriented NASDAQ index rose 0.99%, respectively.
Powell’s appreciation of the market also boosted European stocks. The UK London stock market FTSE100 index rose 0.5%, France Paris CAC40 index 0.3%, Germany Frankfurt DAX index 0.8%. Eurostock 50, a pan-European index, closed at 413.21, up 0.46%.
The New York Stock Market continued its weak trend at the beginning of the market, but the Wall Street Journal (WSJ) evaluated that it rebounded with Powell’s “tight feeling”. Investment sentiment improved when the mayor reaffirmed Chairman Powell’s position of’pigeon’ for two consecutive days. Chairman Powell attended a hearing on the House Financial Services Commission to alleviate concerns about inflation and rising interest rates. He said, “Employment is still unstable and prices will not continue to rise,” he said. “It will take three years or more to reach the Fed’s 2% inflation target,” he said. “We’re not going to tighten up until we’ve achieved significant progress towards our goals,” he said.
This is a further step in the remarks at the Senate Banking Committee hearing on the 23rd. At the Senate hearing, Chairman Powell said, “As the economy is far from its employment and inflation targets, it will take considerable time to achieve further progress.”
Still in the market, concerns about inflation did not go away due to the pace of vaccination, expectations of an economic recovery due to large-scale economic stimulus measures, and the outlook of suppressed consumption. The anxiety that the austerity point will be accelerated when inflation actually starts to rise has not subsided.
Accordingly, the 10-year Treasury bond rate rose to 1.42% at the beginning of the market the day before, but after Powell’s remarks, the market was relieved and pushed back to around 1.39%.