Global Markets Shake Off Rate-Hike Jitters
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What is the main topic discussed in this episode?
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Глобал markets size up President Trump's response to the Fed's rate hike. Плас, Конгрес Бакс неж торговли, що інважня в Україні.
Апизмен із на стратегіч. And this bill is about imposing costs. And making sure that America's strategic interests are protected. And Canada's Prime Minister
takes a swipe at Washington as he welcomes the EU's offer of an alliance for the future. It's Thursday, September 17th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Global markets are having their say following yesterday's Fed rate hike. Despite slumping following that quarter point rise, US markets are on pace to open higher today, and from Asia to Europe, foreign investors have also found something to get excited about too. But with oil prices backing off this morning on optimism about taming disruptions in the Middle East, how much of that response actually has to do with the Fed's move? Better to ask than journal finance editor Alex Frangos.
Alex, I'm curious what's caught your eye in the global market response to yesterday's hike. Has anything? Because after all, there was no real surprise here in the end.
Well, th I think there was a surprise and people didn't know exactly how hawkish Kevin Walsh was gonna be, how determined he would be, in other words, to say that he was gonna fight inflation and and raise rates, not just yesterday, but in the future. And the message was, yeah, we're gonna do that. We're gonna raise rates. What we have in global markets this morning, the day after is stock futures are going up, global stocks are up, bond yields, both US bonds and bonds of other governments are going down. down and what that could be is people reacting to the Fed decision by saying, Hey, he's got a handle on this. We were worried back in June when he kind of said, I I'm gonna be a hands off Fed chief and kind of let the market do what it wants.
And this time he's growing into the role as a much more traditional communicator
Another thing, Alex, that I guess investors couldn't have forecast is how exactly President Trump would take this rate hike. And on that front, we've seen a bit of mixed messaging, I think we could say.
Yeah, there's definitely mixed messaging from the White House Trump saying the US should have one percent rates. And he said he talked to Warsh beforehand, which is not usual form of communications between the Fed chief and the president, at least in the recent decades. But on the other hand, he let him do what he wants. He said, you know, oh, you're on a board and the board wanted to raise rates, so what are you gonna do? That also gives investors some sense of relief after worries about is Wars just gonna be a puppet of Trump and do whatever he says and cut rates when everyone else thinks they should raise rates. And Trump, as much as he, you know, kinda bristled, he didn't do the Jerome Powell thing and say he's gonna fire him and all that kind of thing.
Finally, Alex, from the Fed, yesterday we've got the Bank of England making its right decision very shortly, uh, this morning. What do we expect? Why does it matter?
Yeah, the Bank of England definitely matters. They're expected not to raise rates. But you know, the Fed was pretty aggressive in saying they will. And when the Fed raises rates, other central banks around the world have to respond because it affects them. It affects their borrowing costs and their currencies with the Bank of England today and the Bank of Japan, perhaps even more important tomorrow.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:01–5:49
2
What is the market outlook after the Fed’s latest rate‑hike?
5:49–10:29
3
How did investors react to the Fed’s hawkish tone and future rate plans?
10:29–15:00
4
What was President Trump’s response to the Fed decision and why does it matter?
15:00–15:31
Speakers
3 identifiedMore from WSJ What’s News
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