European shares were steady on Friday after minutes of the Federal Reserve’s latest policy meeting said a “substantial majority” of officials think the pace of interest rate hikes should slow in the coming months.
The regional Stoxx Europe 600, which has risen more than 9 percent in the past month, was flat in early trade, while London’s FTSE lost 0.1 percent.
US markets are closed for Thanksgiving on Thursday, with Wall Street’s benchmark S&P 500 and the tech-heavy Nasdaq Composite up 0.6 percent and 1 percent, respectively, in the previous session.
Minutes of the Fed’s November meeting, at which the central bank raised its key policy rate for the fourth consecutive time by 0.75 percentage points, suggested that while most officials were committed to slowing the pace of interest rates, there is some concern. that inflation has shown “little sign of abating”.
Yet minutes released Wednesday showed officials believe their aggressive crackdown is beginning to bear fruit. “Financial conditions tightened significantly in response to the Committee’s policy actions, and their effects were clearly evident in the most interest rate-sensitive sectors of the economy,” the minutes showed.
“The Fed was ready, willing, worried to slow the pace of hiking, because they still believe they can slow inflation without recession and rising unemployment,” said Steven Blitz, chief U.S. economist at TS Lombard. ” Point increase in December. He said the Fed “will regret that day if they don’t do it.”
US inflation eased in October, with annual price growth slowing to its lowest level since January at 7.7 percent. The data sparked a rally in equity markets, although some investors worried that interest rates would remain very high for most of next year. doubt how much time is left to run it,
Data released earlier on Wednesday showed business activity in the eurozone contracted for the fifth month in a row, according to S&P Global’s flash Eurozone Composite Purchasing Managers’ Index.
The survey of businesses reported declining factory output, falling new orders and slowing employment growth, but also found good news: supply shortages eased, as cost pressures, and companies reported a more upbeat outlook about the year ahead, easing fears of a deep recession next year
Asian shares edged higher in the US on Thursday morning as investors eyed China’s rising Covid-19 caseload. Hong Kong’s Hang Seng index fell 0.7 percent, Japan’s Topix 1.2 percent and China’s CSI 300 fell 0.4 percent.
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