After the close, the Fed hiked interest rates by 25bps, as expected. However, Jerome Powell said the decision on inflation and interest rates has a “long way to go”, and that “ongoing increases in the [Fed Funds] target range will be appropriate in order to … return inflation to 2% over time.” But investors are not listening to him like they use to, they don’t believe that the Fed will keep interest rates high for long, and markets rallied.  They expect rates to not even pass the 5.0%. mark.

As a result, the FTSE was up 0.6% this morning, The focus now turns to the Bank of England and the European Central Bank, which will unveil their monetary policy decisions at 12:00 GMT and 13:15 GMT respectively. The Bank of England is expected to raise rates by 50 bps.

Among stocks, Shell gained 1.4% after it posted record annual profits.

 

Things to read today:

Adani in Crisis as Bonds Hit Distressed Levels, Stock Sale Axed (Bloomberg)

Economists detect dovish undertones from “more optimistic” Jay Powell (Bloomberg)

BOE Poised to Deliver 10th Straight Hike, Forecast of Persistent Inflation (Bloomberg)