LONDON: Stocks rose and US Treasury yields and the dollar fell on Friday after Federal Reserve chair Jerome Powell pointed to a possible rate cut at the central bank’s September meeting.
Powell stopped short of committing to cutting interest rates as he tried to walk a narrow line acknowledging growing risks to the job market while also saying risks of higher inflation remain.
His remarks, to the annual central banking symposium at Jackson Hole, are his final address as chair of the Fed.
Share markets rallied in response to Powell’s speech, and the S&P 500 and Nasdaq Composite rose 1.4 percent and 1.6 percent respectively. The Dow Jones Industrial Average rose 1.6 percent to a record intraday high.
Government bonds also welcomed the news with the rate-sensitive two-year Treasury yield down nearly 10 basis points at 3.69 percent. Benchmark 10-year yields fell 6 bps to 4.27 percent.
