Global markets continue to rebound to the upside. The U.S. S&P 500 broad market index has already soared by more than 130 points from this Monday’s bottom to touch the 4,715-4,725 area before Wall Street’s close yesterday. It was then tested again during the morning futures trade on Tuesday, while major European indexes also gained for the second session in a row.
Federal Reserve’s Jerome Powell gains second term
In an attempt to justify the price changes, financial markets news websites cite the less hawkish speech by the Federal Reserve (Fed) Chairman Jerome Powell during his testimony before the U.S. Senate Banking Committee, which approved his reappointment for a second term.
However, in reality, he only confirmed the Fed’s previous plans to begin normalising the monetary policy in 2022, which would involve “ending asset purchases in March, raising rates over the course of the year”, according to his own words. And “perhaps later this year, we will start to allow the balance sheet to run off,” he added.
Esperio considers that the most exciting part of his speech was the phrase concerning the start of interest rate hikes that could be interpreted in the context that this tightening process may probably not start in March, but later, maybe in June.