European Stock Market decline
The only thing left on the stock market list of FED is US Treasury bonds. Small farmers welcomed a wave of capital purchases. This was because they anticipated an economic slowdown. After the opening of U.S. equities rather than U.S. Treasury bonds in the short and medium term. But by morning, additional money had already fled the U.S. Treasury market. Not only had the colonial interest rates been eliminated. The yield was also continuing to rise. It also demonstrates that despite the fact that money was generally on the sidelines during the midterm elections. Investors in US Treasury bonds are now worried about what will happen next.
Even though three Federal Reserve officials spoke last night, it was obvious that the tone was still rather hawkish, particularly in light of Mr. Williams’ two points. First, he believes that the terminal rate is higher than 3.5%, which in and of itself is not a concern for the stock market. However, it shows that even the hawkish Fed does not intend to raise the federal funds rate above 4%, which means that 4% will face significant pressure. Even though three Federal Reserve officials spoke last night, it was obvious that the tone was still rather hawkish, particularly in light of Mr. Williams’ two points.
European stock indices declined, and the euro dipped below 99 cents for the first time in 20 years. Gas prices in Europe rose as Russia announced that its primary pipeline for supplying gas to Europe will remain closed. Gas deliveries were scheduled to resume on Saturday, but Russia canceled that date on Friday and did not provide a new opening date. The report fueled worries that Europe was headed for a recession, with energy prices skyrocketing hurting both people and businesses.
Stock Market Rebounds
Oil prices started to increase after the middle of the month. US Oil almost reached USD 100 yesterday afternoon. With the publication of one piece of news, the prices of both oils started to decline at the same moment. They have continued to do so till now. The reason for this is that Iraq’s national oil marketing organization, SOMO, is ready to increase oil shipments to Europe. Oil prices fell significantly in both Europe and the US as a result of this behavior. As a result, when looking at the average price of oil throughout the month of August, the contribution to the CPI should be able to decrease by roughly 0.3% to 0.4%, and the price of used automobiles has also decreased, which is also beneficial to the CPI statistics.
As soon as the market opened, European gas prices increased by as much as 30%. A $65 billion support package was announced by Germany on Sunday in an effort to shield its citizens from growing costs. Plans to provide liquidity guarantees to electricity firms were announced in Finland and Sweden. Regarding the 2008 collapse of what was then the fourth-largest U.S. investment bank, Finland’s minister of economic affairs issued a warning about the potential for something akin to a Lehman Brothers of the energy sector.
