Yesterday marked another notable pause from the Federal Reserve in the USA with regards to their interest rate hikes. Whilst this should’ve been met with market optimism, it was the comments from Fed chair Jerome Powell that dampened sentiment. He cautioned that whilst there had been a pause this time, inflation is still higher than they would like, and with a winter and climbing oil prices looming, it’s likely that interest rates will be remaining stubbornly high into 2024 and 2025.
Following on from the Fed’s decision, England, Sweden and Norway are all set to make key decisions on their interest rates. The markets were moody yesterday and into today, as many begin to fear the long-term elevation on interest rates. However, the Bank of England decided to follow the Fed’s lead and left interest rates paused, at 5.25%. Sweden hiked another 0.25%, taking theirs to a total of 4%, whilst Norway chose similarly to raise by 0.25%, taking their fractionally higher to 4.25%. Markets are unlikely to respond in a positive way, given yesterday's Fed response.
The success of a deal for JIP (Japanese Industrial Partners) to buy Toshiba (LON:0Q0C) was announced yesterday. This will take the large tech company off the Japanese stock exchange, following a 74 year stint of being available to public markets. After years of battles with shareholders, especially those based overseas, this is seen as the deal that may free both sides from ongoing disputes.
Sources: Bloomberg, Financial Times, BBC, Nasdaq, Yahoo Finance