The Federal Reserve raised interest rates for the 10th consecutive time! Powell's voice, US stocks plunged! See you at the opening of class A shares

On May 3 local time, the Federal Reserve announced a 25 basis point interest rate hike after the interest rate meeting, which was in line with market expectations. However, then Federal Reserve Chairperson Powell said at a press conference that he had not yet made a clear decision on whether to stop raising interest rates. The three major US stock indexes turned from gains to losses, the international oil price and the US dollar index fell significantly, and the gold and silver futures prices both closed up.

Market participants said that the Federal Reserve is still facing a dilemma. On the one hand, the US economy is under pressure due to interest rate hikes, and the banking crisis is still continuing. On the other hand, domestic inflation is still high. Therefore, the Federal Reserve is expected to remain more cautious in policy choices in the future.

Comprehensive Xinhua News Agency, CCTV coverage, the Russian city of St. Petersburg announced that from now until May 15, drones are prohibited from flying over the city, and drones are also banned within a radius of 150 kilometers around the city.

Fed announces 25 basis point rate hike

On May 3 local time, the Federal Reserve concluded a two-day monetary policy meeting and announced an increase in the target range of the federal funds rate by 25 basis points to between 5% and 5.25%, in line with market expectations. This is already the 10th consecutive interest rate hike since the Federal Reserve started this round of interest rate hikes last year, with a cumulative rate hike of 500 basis points.

In its statement, the Fed dropped language that "further rate increases are appropriate", signalling a pause.The statement repeatedly reiterated that it would take into account the tightening of several times since the current round of interest rate hikes and the lag of the transmission mechanism to determine the "degree of additional policy tightening in the future".

Market participants said that the previous interest rate hikes have had a negative impact on the US economic outlook. According to data released by the US Department of Commerce recently, the real GDP of the United States in Quarter 1 this year increased by 1.1% on an annualized basis, significantly lower than the 2.6% in the fourth quarter of last year and lower than market expectations. At the same time, the US banking crisis continues to ferment. This week, First Republic Bank became the third bank to fail in two months.

FXTInflation remains the determining factor for future Fed monetary policy, the group said in a research note, while Invesco analysts believe the Fed would have made two or three more 25 basis point rate hikes had it not been for the recent banking turmoil in Europe and the US.

Powell: No clear decision has been made on whether to stop raising interest rates

Federal Reserve Chairperson Jerome Powell, speaking at a press conference on the day's decision to raise interest rates, said the Federal Reserve has not yet made a clear decision on whether to stop raising interest rates.

Powell said that in principle, there is no need to raise interest rates too high. The US economy is expected to grow moderately without a recession.

Inflation in the US is still well above its 2 per cent target, and the Fed will continue to set monetary policy "data-dependent", with further rate rises still likely.He believes more data is needed to determine whether the federal funds rate is sufficiently tight.

When Powell mentioned the acquisition of First Republic Bank by JP Morgan Chase on the same day, he said that large-scale acquisitions by large banks are not a good policy, but the acquisition of failed banks is a good outcome for the banking system. It is valuable to have banks of different sizes within the system to achieve different goals.

The latest data from the US Labor Department shows that the consumer price index (CPI) rose by 5% year-on-year in March this year, a decrease from the previous value, but still above the Federal Reserve's 2% target.

Markets expect the Federal Reserve to start cutting interest rates as early as September

Markets are most focused on when the Fed will shift to monetary easing, with most market participants expecting a 25 basis point hike to be followed by a pause before starting to cut rates as early as September, according to CME Group's "Fed Watch" tool.

Investors are already shorting the dollar. Hedge funds and other large institutional investors increased their net short dollar positions against other major currencies to more than 70,000 by April 25, the highest since June 2021, Bloomberg analysts said, citing data from the Commodity Futures Trading Commission.

U.S. stocks turned from gains to losses, and international oil prices fell sharply

After the Federal Reserve's decision was announced, the U.S. stock market rose for a while, and the Dow index rose more than 100 points. At the beginning of Powell's press conference, the Dow and S & P briefly turned down, but at the end of the session, the U.S. stocks could not maintain their gains and finally closed down. By the end of the day, the Dow fell 0.80% to 33,414.24 points, the S & P 500 index fell 0.70% to 4,090.75 points, and the Nasdaq fell 0.46% to 1 2025.33 points.

The performance of large technology stocks was divided, with Apple down 0.65%, Amazon up 0.02%, Netflix up 0.55%, Google up 0.09%, Facebook down 0.92%, and Microsoft down 0.33%.

Major financial stocks collectively fell, with JPMorgan Chase down 2.07%, Goldman Sachs down 1.39%, Citi down 0.70%, Morgan Stanley down 1.75%, Bank of America down 1.03%, and Wells Fargo down 0.46%.

Well-known energy stocks fell, ExxonMobil fell 1.97%, Chevron fell 2.00%, ConocoPhillips fell 2.67%, Schlumberger fell 1.99%, and Western Petroleum fell 1.77%.

Popular Chinese concept stocks were mixed. Among Chinese concept new energy automobile stocks, NIO rose 2.68%, XPeng Motors fell 0.77%, and Li Auto fell 0.74%.

International oil prices fell sharply. By the end of the day, light crude oil futures for June delivery on the New York Mercantile Exchange fell $3.06 to close at $68.60 a barrel, or 4.27%; London Brent crude oil futures for July delivery fell $2.99 to close at $72.33 a barrel, or 3.97%.

The dollar index also fell significantly. The dollar index, which measures the greenback against six major currencies, fell 0.58% on the day to close at 101.3551 in late foreign exchange trading.

Gold and silver futures both rose in New York. Gold for June delivery rose $13.70, or 0.68 percent, to $2,037 an ounce on the New York Mercantile Exchange. Silver for July delivery rose 6.2 cents, or 0.24 percent, to $25.681 an ounce.

Westpac is considering various strategic options

Westpac fell more than 53% after the US stock market closed on Wednesday, May 3, and its share price fell below the $3 mark in after-hours trading. The bank has been in the spotlight since the regional banking crisis broke out in the United States in early March. Since then, the bank's market value has shrunk by about 85% until Wednesday's close, and its market value is about 772 million US dollars.

The Beverly Hills, Calif.-based regional lender is looking at several strategic options, media reports said. The bank has been working with a financial adviser and is already considering a spin-off or financing, people familiar with the matter said. While open to a sale, the bank has not yet initiated a formal invite tenders process, the people said. The sale did not go well because few potential buyers were interested in buying the entire bank, which includes a community bank called Pacific Western Bank and some commercial and consumer lending businesses, the sources said.