Wall Street celebrated after statements by the president of the US Federal Reserve (Fed), who admitted the possibility of a slowdown in the pace of interest rate hikes as early as December.
After Powell’s words, the Standard & Poor’s 500 gained 3.09% to 4.080,11 points, having ended the month of November registering the second consecutive monthly gain, as had not been seen since August last year.
In turn, the industrial Dow Jones ended the day adding 2.18% to 34,589.77 pointsthus getting a score 20% above the minimum recorded on the 30th of September.
The technological Nasdaq Composite raised 4.41%, to 11,468 pointsrenewing maximums of about two months.
Markets were buoyed by Powell’s words. The Fed chairman acknowledged – in line with the minutes of the central bank’s last monetary policy meeting – the need to slow down the pace of interest rate hikes and pointed to the December meeting as the date on which this could happen.
Even so, Powell stressed that one should wait for further increases in the reference rate to drive inflation to the 2% target. “History strongly warns against premature relief [do endurecimento] of monetary policy. We will stay the course until the job is done,” he concluded.
Thus, the market anticipates that, interrupting the sequence of the last four consecutive increases of 75 basis points, the federal funds rate will rise only 50 basis points at the next meeting of the US central bank, scheduled for December 13th and 14th. The key interest rate is now set at a range of between 3.75% and 4%.