There was great excitement about Fed Chairman Jerome Powell’s speech at the annual conference in Jackson Hole on Friday, and then especially about what he wanted to say about the downsizing of securities purchases.
Earlier Friday, Roger Berntsen in Nordnet described the speech as one of the most important of the year.
“Powell is expected to provide the market with more specific information related to the quantitative easing and reduction of these,” he wrote in an update.
Investors were clearly well prepared for the message that the downsizing could begin later this year, because they were not intimidated at all. Only the so-called fear index VIX fell.
- Dow Jones ended up 0.69 percent, and ended at 35,455.80 points at the close of trading.
- S&P 500the index rose by 0.88 percent to 4,509.37 points.
- Nasdaq rose the most with an increase of 1.23 percent to 15,129.50 points.
“The committee remains steadfast in its often stated commitment to support the economy, as long as it is needed to achieve a complete recovery,” Powell said.
Although “tapering” may begin this year, the central bank governor pointed out that he is in no hurry to raise interest rates. Before it becomes relevant, the economy must have reached a level “consistent with maximum employment, and inflation must have reached 2 per cent, and be on the trail of and barely surpass it for some time”.
The rise on Friday was broad, but especially oil and energy companies got wind in their sails.
Occidental Petroleum Corp rose the most with an increase of close to 7 percent.
Friday night, the price of a barrel of Brent oil is up 2.21 percent to $ 72.64.
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