• 19/08/2022 4:43 pm

SHANGHAI, Aug 20 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

 

The dollar gained but equities, gold and oil retreated on Wednesday after the Federal Reserve suggested it could pursue aggressive stimulus measures for longer than under its previous strategy, minutes from its last policy meeting showed.

Federal Open Market Committee members expressed concern at their latest meeting over the future of the economy, saying that the coronavirus likely would continue to stunt growth and potentially pose dangers to the financial system.

At the July 28-29 session, the Federal Reserve’s policymaking arm voted to keep short-term interest rates anchored near zero, citing an economy that was falling short of its pre-pandemic levels.

As Chairman Jerome Powell and Fed leaders have emphasized multiple times, the minutes noted a consensus on the need for more fiscal help from Congress, which went into recess without a deal for more rescue funding even as critical elements such as enhanced unemployment insurance remain expired.

 

On Wall Street, stocks closed lower on Wednesday as a grim outlook on the economy from the Federal Reserve thwarted the enthusiasm around a record valuation for Apple.

The S&P 500 fell 0.4% to 3,374.85. The Dow Jones Industrial Average slid 85.19 points, or 0.3%, to close at 27,692.88. The Nasdaq Composite lagged, falling 0.6% to 11,146.46.

In the minutes from its July meeting, the Fed said “the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term and was posing considerable risks to the economic outlook over the medium term.” The Fed kept rates unchanged last month, noting the economy was still in need of monetary support.

That comment knocked the S&P 500 from an intraday record set earlier in the session. The Dow and Nasdaq also turned negative after the minutes were released.

Earlier in the day, the major averages rose as Apple became the first US company to reach a market cap of $2 trillion. With that milestone, Apple officially doubled its valuation in just over two years. In 2020 alone, Apple has surged nearly 60% and was one of the stocks leading the market off its coronavirus lows. The stock closed well off its highs, eking out a gain of just 0.1%.

 

Gold dropped below the key $2,000 level on Wednesday as a five-session sell-off in the US dollar paused, and the Federal Open Market Committee expressed concern at their last meeting over the future of the economy.

Spot gold was down 1.6% to $1,968.84 per ounce, while US gold futures slipped 1.7% to $1,979.20.

Fed minutes showed the FOMC believes that the coronavirus likely would continue to stunt growth and potentially pose dangers to the financial system.

Widespread stimulus measures and a low interest rate environment pushed gold prices to an all-time peak on Aug 7, but bullion has pared gains since then.

Gold was also pressured as a senior Trump administration official said a smaller coronavirus relief bill worth around $500 billion could be reached, as opposed to one between $1 trillion and $3 trillion that had been previously expected.

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