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Thursday 15th June

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Signs of Hope on US Interest Rates with More to Come Today in Europe

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Mixed US markets

Yesterday, the Federal Reserve announced a pause in raising interest rates, after 10 consecutive increases to the levels. This was met with initial optimism on the markets, as the S&P 500 and Nasdaq indexes hit highs that haven’t been seen for months. However, the Fed signalled that this was unlikely to be the end to changes and they may need further increases which led to a flattening of the markets and a slow start to Thursday.

UK economic growth

Data released on the UK economy showed growth of 0.2% for the last quarter. Whilst this figure isn’t going to set the world on fire with excitement, it’s stronger than many analysts had forecast. Whilst this news coupled with the US interest right pause would usually bolster markets, they were seemingly unmovable and remained flat.

European interest rates

Most are expecting the European Central Bank to announce a further hike to interest rates by 0.25% (or 0.25 basis points) today, which would take them to their highest level in 22 years. Whilst the US were able to give the good news of a much demanded pause yesterday, inflation is still unacceptably high, sitting at 6.1% across the wider eurozone region. They will also announce their views on future outlook, which will impact markets as they gauge if the future looks bright or bleak.

Sources: AJ Bell, Nasdaq, Financial Times, Reuters

Zoe Burt