Global stocks drop as Fed signals slower pace of rate cuts
global stocks was set for its biggest weekly drop in two months and the 10-year U.S. Treasury yield hit its highest level in 5-1/2 months on Friday as economic data and comments from Federal Reserve officials suggested a slower pace of interest-rate cuts ahead.
Fed Chair Jerome Powell said on Thursday the central bank did not need to rush to lower interest rates due to ongoing economic growth, a solid job market and inflation that remains above its 2% target.
The U.S. Commerce Department reported on Friday that retail sales rose 0.4% last month after an upwardly revised 0.8% advance in September. The growth topped the 0.3% rise expected by economists polled by Reuters, after a previously reported 0.4% gain in September.
«In the last 48 hours we've had some pretty big changes, not just from the election but from economic data that was better than expected and Powell speaking about not having to be as aggressive on interest-rate cuts,» said Adam Rich, deputy chief investment officer for Vaughan Nelson in Houston.
«Market expectations for interest-rate cuts have come down materially and also the market is re-adjusting after a pretty bullish reaction to the U.S. election.»
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