The AI giant Nvidia presents quarterly figures on Wednesday evening. The minutes from the Fed’s last interest rate meeting show that the central bank will be careful not to cut interest rates too early.
Foto: ANDREW KELLY / Reuters / NTBPublisert:
Today 15:32
Updated less than 20 minutes ago
On Tuesday, Wall Street opened the shortened trading week broadly lower. The decline continues on Wednesday.
There have been only small movements since the Federal Reserve presented the minutes from the interest rate meeting in January.
This is how the exchange day ended:
- The Dow Jones rose 0.13 percent.
- The technology index Nasdaq closed down 0.32 percent.
- The collective index S&P 500 rose 0.13 percent.
Read on E24+
Stopped Elon Musk’s giant share package: – We caught them in the act
Interest rate report from the Fed: Will be careful not to cut interest rates too quickly
On Wednesday evening Norwegian time, the American central bank Federal Reserve (Fed) presented the minutes from the interest rate meeting 30 to 31 January.
At the interest rate meeting in January, the central bank kept interest rates unchanged. Today’s interest rate level in the range of 5.25-5.5 has been stagnant since July and is the highest in the US in 22 years.
The members of the interest rate committee indicated that they are in no rush to cut the interest rate. At the same time, they expressed both optimism and caution about inflation.
The committee members also express that they want to see more data before they start easing monetary policy. The interest rate increases are probably over, they believe.
The report also points to a general optimism that the Fed has succeeded in lowering the rate of inflation. They nevertheless express concern about cutting interest rates too early.
– When the committee discussed the outlook for interest rate policy, they considered that the policy rate has probably reached the peak in this tightening cycle, the minutes state.
– The committee noted that it will not be appropriate to reduce the policy rate until they have gained greater confidence that inflation has moved towards two per cent in a sustainable manner.
Price inflation in the United States landed at 3.1 percent in January, compared to the same month last year, after it jumped to 3.4 percent in December. Core inflation came in at 3.9 per cent, unchanged from the previous month.
Jerome Powell, chairman of the US Federal Reserve. Photo: KEVIN DIETSCH / AFP
After the report was presented, a probability of 31 percent is priced in that the key interest rate will be cut in May, according to CME FedWatch Tool. The market is almost certain that there will be no cuts already in March.
Handelsbanken wrote in a morning report on Wednesday that strong consumer and producer price figures have helped dampen expectations of an interest rate cut in March.
– Despite the fact that the inflation figures up until then had shown a convincing downward trend, neither Powell nor the other members were fully convinced that price growth was more on the way to the target on a more permanent basis; which is the condition for them to lower the interest rate. Powell also directly expressed that there was little likelihood of an interest rate cut as early as March, writes Handelsbanken.
also read
Tough fight against price inflation in the US: – The economic key figures are strong
Nvidia presents numbers
On Wednesday evening, American Nvidia presents figures for the accounting period that ended on January 28. Nvidia, which produces computer chips that AI companies need, has shot up on the stock exchange during 2023.
Goldman Sachs’ trading desk refers to the share as “the most important share on earth”, writes Bloomberg.
Nvidia alone has accounted for a third of the rise in the Nasdaq 100 index, according to the news agency.
– There are not many companies in the world that make as much money as Nvidia. It is unique, says investment director Robert Næss at Nordea, to E24.
The share fell 2.85 percent on Wednesday.
Jensen Huang, co-founder and CEO of Nvidia, is expected to present strong figures on Wednesday evening Norwegian time. Here from a previous occasion. Photo: I-HWA CHENG / AFP / NTB
The analysts hope that the report can provide a clue as to how long the AI boom can last.
– The market is more discerning and increasingly voracious. Nvidia may deliver, as they did last season, but it may not be enough for a market desperate for even more from the superstars – and Nvidia has been called the superstar of the tech world, says Quincy Krosby, global chief strategist at LPL Financial, writes CNBC.
also read
Nvidia presents figures: – Has shocked the market every quarter
also read
Fears fluctuations and uncertainty with Trump: – He has rattled his saber
Read on E24+