Wall Street and European stock markets suffer sharp declines while the euro and the pound fall to historic lows against the dollar

Operators working at the London Stock Exchange (REUTERS / Simon Dawson / File) (Simon Dawson /)

European equity markets opened lower on Fridaywith tech stocks leading declines, after the US Federal Reserve made another big interest rate hike and signaled more hikes in its fight against persistent inflation.

At the same time, the pound sterling falls 1.5% to 1.10 per dollar, while the euro trades below 0.98 cents against the US currency, in both cases marking historical lows.

In wall streetfutures predict a day of losses that could accentuate the trend of recent weeks, which have plunged the Dow Jones index below 30,000 points.

The dollar strengthens against the pound sterling (REUTERS/Dado Ruvic/Illustration/File)
The dollar strengthens against the pound sterling (REUTERS/Dado Ruvic/Illustration/File) (DADO RUVIC/)

The Pan European Index STOX 600 fell 2.20% at 12:30 GMT, while the German DAX lost 2.15%. Interest-rate sensitive European technology stocks fell around 2.5%.

The Federal Reserve raised interest rates on Wednesday by 75 basis points for the third time in a row. and sees its target interest rate at its highest level since 2008, rising to the 4.25%-4.50% range later this year.

Isabella Schnabela member of the Board of Directors of the European Central Bank, stated that interest rates they should keep going upas inflation remains too high, even as the euro area faces an economic downturn.

the london index FTSE100 fell 1.9%, the Eurostoxx 50, which includes the 50 largest companies in the eurozone, fell 2.10%; the ACC 40 on the Paris Stock Exchange lost 1.87%; and the IBEX 35of the Spanish stock market, fell by 2.32%.

The Federal Reserve building in Washington (REUTERS/Leah Millis/File)
The Federal Reserve building in Washington (REUTERS / Leah Millis / File) (LEAH MILLIS /)

The decision of the Federal Reserve

After a two-day meeting, the members of the Federal Open Market Committee of the Fed made the decision to raise interest rates, which was justified by the president of the Reserve, Jerome Powellat a press conference.

The economist said that central bank authorities are “firmly resolved” to reduce inflation from the highest levels in four decades and “they will keep doing it until the job is done”.

Powell assured that agency officials see the need to raise the reference rate to a “restrictive level” and “keep it there for some time”. “We are committed to bringing inflation back to 2%,” she said.

In that sense, he stressed that the prospects of the so-called “landing smooth” of the economy would likely decline if central bank officials find that monetary policy needs to be further tightened. restrictive or restrictive for longer.

In this regard, he noted that it is “very challenging” and that his colleagues are not sure whether the process of tightening monetary policy will lead to a recession or how deep any contraction might be.

Powell had already anticipated last July, when he announced the previous rise, that in September there would possibly be another “increase unusually large” of the guys, a prediction that he has been reaffirming in his latest public speeches.


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