17th June 2021 Morning Report

Thursday 17th June 2021

US stocks fell after, Federal Reserve officials indicated they expect to raise interest rates by late 2023, which is sooner than they initially expected in March. The Fed Chair Jerome Powell also discussed a tapering of the Fed’s bond buying programme, but stated that the timing of such action is still uncertain. The 10 - year Treasury yield was slightly higher. The Dow Jones Industrial Average fell 0.8%, the S&P by 0.5% and Nasdaq Composite by 0.2%

Balanced against the improving economic terrain, the US is still 7.5 million jobs short of where it was in early 2020, and the reopening of schools, and other public areas are still very much a work in progress. Consequently, actual change in monetary policy is likely months down the road as the Fed balances a variety of risks, but the key is the Fed has signalled that change is coming to monetary policy but in such manner that avoids any rapid shift in sentiment among investors or consumers that could endanger the economic recovery.

Morning Report 17 June 2021

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