The US stock exchanges showed mixed results on Wednesday. At the close in New York, the Dow Jones Industrial Average calculated at 48,862 points, representing a decline of 0.6% from the previous day’s close. Meanwhile, the broader benchmark S&P 500 was slightly negative with approximately 7,136 points, while the technology-heavy Nasdaq 100 registered gains of 0.6%, reaching around 27,187 points.
Separately, the Federal Reserve maintained the key interest rate at its Wednesday meeting. This decision reflected the division among the members of the Open Market Committee, much like the situation that occurred in 1992. The committee issued a statement noting that it would carefully evaluate incoming data, emerging prospects, and the overall risk landscape regarding potential adjustments concerning the scope and timing of future changes. However, three members disagreed with the formulation, arguing that it showed an inclination toward easing policy. This disagreement was rooted in growing concerns about inflation resulting from the oil crisis, although one banker pleaded for faster rate cuts, believing the accommodative stance was not happening quickly enough.
In other news, the relevant Senate committee approved Donald Trump’s nomination to succeed Jerome Powell as the central bank chief. This means that only approval from the full Senate floor is required for Kevin Warsh to potentially assume the role of Fed Chairman in mid-May.
Powell himself stated that he intends to remain as a governor on the Federal Reserve board. He stated that staying was unavoidable given a series of legal challenges facing the institution. Speaking out, Powell said, “These legal actions by the government are unprecedented in our 113-year history. I fear that these attacks will shake the institution and endanger what truly matters to the public: the ability to conduct monetary policy without considering political factors”.
Shifting economic focus, oil prices surged dramatically. The price of a barrel of North Sea Brent blend stood at $119.80 on Wednesday evening (according to German time), marking a 7.6% increase from the previous day’s close. This sharp rise was attributed to reports suggesting that US President Donald Trump viewed the extension of the Iran blockade for several months as possible.
Currency movements saw the Euro weaken compared to the US Dollar. On Wednesday evening, one Euro cost $1.1677, while the Dollar exchanged for 0.8564 Euros. Meanwhile, the price of gold decreased noticeably, dropping by 1.1% to $4,546 per fine ounce in the evening, equating to 125.17 Euros per gram.
