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Global stock markets advanced, and the US dollar spiked on Friday after Federal Reserve Chair Kevin Warsh labelled persistent inflation “concerning,” signalling potential interest rate hikes.
Speaking at the Jackson Hole symposium in Wyoming, Warsh warned that the central bank must see inflation return to its two per cent target “clearly and at sufficient speed,” adding that “otherwise, we have work to do.”
Yields on short-term US Treasury bonds surged immediately following his remarks, boosting the dollar as investors positioned for higher borrowing costs ahead of the Fed’s December meeting.
Despite the prospect of tighter monetary policy, strong economic performance and solid employment figures reassured equity investors.
Wall Street indices pushed higher alongside European markets, where Paris gained one per cent, driven by luxury sector stocks.
Asian markets ended mostly higher, though technology shares lost momentum after Thursday’s rally fuelled by Nvidia’s earnings beat.
Oil prices pulled back slightly as Iran’s foreign minister indicated openness to diplomatic talks with the United States to end the ongoing conflict.
However, market sentiment remained guarded as the US Treasury Department imposed sanctions on Egyptian bank operations in the UAE, expanding its economic pressure campaign to force the reopening of the Strait of Hormuz.
