(News Bulletin 247) – While the boss of the US Federal Reserve has toughened its tone, the CAC 40 stabilized on Wednesday, after a sharp decline on Tuesday.

The Fed boss continues to bring rain and shine to the financial markets. This Wednesday, the Paris Stock Exchange is skating the day after the remarks of the President of the American Federal Reserve who warned that the rate hikes could be greater than anticipated in order to fight against stubborn inflation in the United States.

The CAC 40 is stable (+0.02%) at 7,340.85 points around 12:10 p.m., the day after a drop of 0.46%. Since the start of the year, however, the Parisian rating has gained more than 13%.

US central bank chief Jerome Powell sent markets tumbling on Tuesday saying he would continue to fight inflation, standing ready to pick up the pace of Fed rate hikes again and raise them further. provided that.

“It’s been some time since the speeches of Jerome Powell, the chairman of the Fed, had not had a negative and immediate effect on the markets, affecting in particular risk taking”, observes Sebastian Paris Horvitz at LBPAM. “Jerome Powell’s speech seems to have consolidated the idea that monetary policy will remain restrictive beyond 2023,” he continues.

The American rate over 2 years at more than 5%

This is reflected in the bond market, where the US two-year debt rate was at its highest since 2007, above the 5% mark.

The Fed had slowed its rate hikes in early February, opting for a 25 basis point (0.25 percentage point) hike, but this time investors are now mostly expecting a 50 basis point rate hike during the next meeting of the Fed’s Monetary Policy Committee in two weeks.

The Fed has been raising its rates for a year to slow down the economy by raising the cost of credit, but despite all its efforts, consumption has remained solid, inflation even started to rise again in January and the job market remains tense.

During the session, investors will again listen to Jerome Powell who will speak this time before the Financial Services Committee of the House of Representatives. They are also awaiting figures on American employment, the publication of which is scheduled for the day.

Casino picks up again

As for values, Thales shares fell 2.56% to 129.25 euros. However, the group recorded record order intake in 2022, up 18% to 23.6 billion euros.

The Casino title fell by 6.83% to 8.87 euros. The group announced on Tuesday the study of a new project to sell part of its stake in the Brazilian Assai, “in order to accelerate its deleveraging”.

(With AFP)