‘Hawkish cut’ rouses emerging market ‘sheep’
The US Federal Reserve delivered what one syndicate banker termed a “hawkish cut” on Wednesday, as US Federal Reserve chairman Jerome Powell indicated there is no hurry to follow the 25bp interest rate cut with further monetary loosening. Emerging market bonds and US equities sold off as the mood darkened, with fears that further selling will be triggered. Sam Kerr, Lewis McLellan and Francesca Young report.
Many in equity markets had expected this week would see the start of a prolonged easing cycle, with some predicting three rate cuts in the US before the end of 2020.The S&P 500 fell by more than 1% after Powell referred to Wednesday’s cut as a “mid-cycle ...
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