The Cac 40 engages the reverse gear, the Fed determined to fight against inflation – Investing

The Fed is “strongly determined” to fight inflation. This is the message delivered by the head of the US Federal Reserve, Jerome Powell, during his semi-annual hearing before the Senate Banking Committee on Wednesday. Faced with an ever-increasing price increase, the monetary institution indicated that rates will continue to rise, at a pace that will depend on the next economic indicators, until the appearance of “convincing evidence”. showing that inflation is decelerating. Over the past three meetings, the Fed has already raised Fed funds rates by a cumulative 150 basis points, bringing them within a range of 1.50% to 1.75%. “We have both the tools we need and the determination it takes to restore price stability on behalf of American families and businesses,” said Jerome Powell, adding that it is possible that the increase of the cost of money causes a recession. It “will be very difficult” to achieve a soft landing for the economy. For the time being, economic conditions are generally favorable, with a solid labor market and still high demand, he added. Oil price ebb This statement is anything but a surprise. And do not shed light on the magnitude of future rate hikes. On the stock market, operators, already reluctant to take risks, stayed away from the equity markets even if the drop in the Cac 40 eased in the afternoon thanks to Wall Street. At the close, the Parisian index lost 0.81% to 5,916.63 points, erasing its gains the day before. The business volume totals 3.4 billion euros. Across the Atlantic, the Dow Jones was stable at the end of the European session while the Nasdaq Composite gained 0.9%. A sign that operators fear a slowdown in the economy, oil prices have fallen. The barrel of Brent from the North Sea fell 4.1%, to 109.7 dollars, and the American benchmark WTI lost 4.5%, to 104.7 points. Their decline was accentuated by the decision of the American president to ask Congress to suspend a federal tax of 18 cents per gallon (3.78 liters) on diesel and gasoline for three months in order to relieve consumers. He is also preparing to urge the country’s 50 states to temporarily halt their own taxes on petroleum products. In Paris, CGG, Vallourec and TotalEnergies dropped between 2.88% and 7.41%. from “overweight” to “neutral”. To make matters worse, the Belgian specialist in the recycling of non-ferrous metals Umicore fell by 8.02% in Brussels after the announcement of an investment plan of 5 billion euros by 2026, “significantly” higher. to Jefferies’ forecasts, which will weigh on the accounts for the next few years. Also battered, Rexel lost 5.41% following an article by Mediapart evoking suspicions of tax evasion in Switzerland and illicit agreement on the costs. Schneider Electric (-1.5%) and Legrand (-1.5%) are also in turmoil. Derichebourg dropped 5.66%. Oddo BHF lowered its recommendation on the business and environmental services group from “overweight” to “neutral” and reduced its price target from 14.50 to 9.50 euros. Conversely, Barclays went from “underweight” to “online weighting” on the title of the telecom operator Orange (+1.65%).