Fed's move at July meeting continues to worry investors

The Fed's July meeting showed a split over interest rate hikes, which has investors worried about another rate hike. US stocks continued to fall in the last session on Wednesday, August 16, 2023.

In the minutes of the Fed meeting, some officials said that further tightening of monetary policy was necessary to curb inflation.

Divided opinions on Fed interest rates make investors worried (Photo TL)

Chase Investment Counsel President Peter Tuz agreed, "I agree with the Fed officials that we can't be confident that inflation is completely under control. I think the market's next move will depend on the signals and actions of the Fed in September and October."

On the other hand, Philadelphia Fed President Patrick Harker, who was also Atlanta Fed President Raphael Bostic, said there was no need for another rate hike.

Not only that, New York Fed President John Williams, who is also vice chairman and a permanent voting member of the Federal Open Market Committee, has begun discussing a timetable for a possible rate cut in the near future.

The divergence of opinions among Fed officials on interest rates has affected investor sentiment in the stock market. At the end of the trading session on August 16, 2023, the Dow Jones index fell 0.52% to 34,765.74 points. The S&P 500 index fell 0.76% to 4,404.33 points. The Nasdaq Composite index fell 1.15% to 13,474.63 points.

The Fed's basic interest rate policies not only affect investor sentiment but also directly affect exchange rates and production and export activities of Vietnamese enterprises. Yesterday, August 16, 2023, the USD price on the interbank market increased by 65-85 VND. The State Bank also increased the central exchange rate by 37 VND per USD, to 23,918 VND/USD.

In the first two weeks of August alone, the central exchange rate increased by 161 VND, equivalent to an increase of nearly 0.7%. The selling price of USD at the State Bank of Vietnam Exchange also increased to 25,063 VND while the buying price remained at 23,400 VND.

Source: https://www.congluan.vn/dong-thai-cua-fed-trong-cuoc-hop-thang-7-tiep-tuc-khien-gioi-dau-tu-lo-lang-post260834.html