Fed Keep Rates Unchanged
The Federal Reserve kept interest rates unchanged at 0.25% on Wednesday as it continues to forecast a contraction in the US economy in the “near term”.
The news comes as no surprise to markets which are somewhat priced in the Fed’s stance. The federal reserve went on to forecast a confirm they see a potential contraction of 6.5% contraction in the U.S. economy in 2020
After the recent historical Non- farm payroll figures, which saw the U.S. jobs market create 2.5 million jobs. The Fed believes the unemployment rate for 2020 will be around 9%.
Gold which had been consolidating, rose by $14 on the news. Markets now await Chair Powells’ press conference.
OECD Fears Record Slump
Prior to the Fed announcing their 2020 forecast, the Organisation for Economic Cooperation and Development provided a bleak outlook for 2020.
According to the OECD the global economy will suffer the biggest contraction in close to over a century before it emerges next year from a coronavirus-inflicted recession.
The group stated that a second wave of contagion this year could result in the global economy contracting by 7.6% before growing only 2.8% next year.
Tech Rallies Continue
This Wednesday saw Shares of Amazon and Apple gain more than 2% each leading to both recording all-time highs. Alphabet and Netflix rose 0.6% and 0.2%, respectively.
Stocks continue to benefit from the economy reopening.
The Nasdaq trades at a new high for the fourth session in a row.
“Never, ever argue with your trading system”Michael Covel
Gold: Gold once again rallied with force. The metal rose between $14 – 18 as the Fed decided to keep rates unchanged.
UK100: As the Sterling strengthens, the FTSE continues to drop as investors move away in search of better value in other indices.