Global Stocks Follow Wall Street Lower as Fed Signals Independence

Global Stocks Follow Wall Street Lower as Fed Signals Independence

Federal Reserve will be looking at Facebook's cryptocurrency Libra in close detail and likely to impose "very, very high" standards on consumer protection on the crypto, from a regulatory standpoint, the central bank's chairman Jerome Powell said on Tuesday.

"Weakness in those stocks shows people getting out of the market, out of ETFs", Tuz said.

Talking about the central bank's future monetary policy move during an event held by the Council on Foreign Relations in NY on Tuesday, Powell admitted that he and his colleagues have been grappling with the question that "whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation".

"We're human, we'll make mistakes - I hope not frequently - but we'll make mistakes but we won't make mistakes of integrity or character", Powell said.

Fed officials acknowledged on Tuesday that weakening economic conditions may merit lowering interest rates in the coming months, but they poured cold water on the idea that any cuts would be swift and influenced by Trump's demands.

In early European trade, the pan-region Euro Stoxx 50 futures were down 0.29%, German DAX futures lost 0.31% and Britain's FTSE futures slipped 0.26%. Losses were tempered in Asia, with South Korea's Kospi down 0.09 percent and Australia's ASX 200 down 0.12 percent.

Last Wednesday the Fed opted to hold rates steady at the current target range of 2.25% to 2.5%, and Powell said in the press conference that the "law is clear" that he has a four-year term.

Trump said Fed Chair Jerome Powell was doing a "bad job" managing policy as countries like China stimulate their economies. Japan's Nikkei retreated 0.6%. "China trade talks are quite low, so any signs of an improvement could bode well for risk sentiment".

The dollar index against a basket of six major currencies was up 0.15% at 96.302, extending modest overnight gains. On Tuesday morning, consumer confidence dropped to the lowest level since September 2017.

The Japanese yen weakened 0.44% versus the greenback at 107.68 per dollar. Fed officials have reaffirmed independence of the central bank, saying its policy remains data-dependent - which doesn't mean rates couldn't go down soon.

The dollar wobbled as the currency market tried to guess and second-guess the US Federal Reserve's next move.

The kiwi last traded 0.2% higher at $0.6651.

US stock indexes dropped following Powell's remarks while yields on US Treasury bonds ticked higher.

The U.S. data helped underpin a crude market already buoyed by worries over potential U.S. -Iran conflict.

Spot gold shed 0.93% to $1,409.50 an ounce.

Tyson Foods Inc and Pilgrims Pride Corp dipped 1.1 per cent and 1.3 per cent, respectively, after the US Department of Justice opened a criminal probe over possible poultry price fixing. The precious metal was still up 8.5% so far this month.

Related Articles