(News Bulletin 247) – The CAC 40 is moving down sharply in mid-session, while the US Federal Reserve has, as expected, paused in its rate hikes. But its president, Jerome Powell, implicitly indicated that further increases were to be expected.

The Fed again stumbles the Paris Stock Exchange. At mid-session this Thursday, the CAC 40 lost 0.6% to 7286.05 points, falling back below 7300 points.

The American Federal Reserve (Fed) has, as expected by the market, opted for the status quo on its rates on Wednesday evening. But the “dot plot”, that is to say the projections of its members, show that these same members are counting on a level of key rates of 5.6% at the end of the year, against 5.1 % in the previous March projections, and a rate currently between 500 and 525 basis points (5% and 5.25%). In other words, rate hikes of around 50 basis points could still be passed by the Fed by the end of the year.

“We can deduce that there is already no longer any doubt about the intention of the Fed to raise its rates again next July. The markets will have to get used to high rates being the norm for a long time. “, judge William Gerlach, regional director France and United Kingdom at iBanFirst.

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A break that seems very temporary

Fed Chairman Jerome Powell clearly went in this direction during his press conference. The central banker notably indicated that almost all members of the Fed were in favor of further rate hikes. The break decreed on Wednesday evening is therefore only intended to give time to assess the latest data necessary for future decisions.

“Nevertheless, the market rallied as Powell highlighted the reliance on data [des futures décisions de la Fed, NDLR] and noted, with regard to the dot plot, that he was not “very confident that we can see where the fed funds rate is[ait] so far in advance”. So this is an admission of uncertainty,” says Deutsche Bank.

After the Fed, the European Central Bank (ECB) will announce its monetary policy decision at 2:15 p.m. and then its president, Christine Lagarde, will hold her traditional press conference at 2:45 p.m.

“It is widely anticipated that there will be another 25 basis point hike, which would take the deposit rate to 3.50%. The big question will therefore be what the signal from the ECB will be in the future. and if it aligns with market prices which only foresee one more increase after today’s,” Deutsche Bank warned.

Balyo soon to be acquired by the Japanese juggernaut Softbank

As for values, Ipsos is up 2.5%, the market appreciating the investor day held on Wednesday during which the polls and studies group unveiled its ambitions in generative AI.

On small caps, Balyo jumped more than 50% after announcing that it would be the subject of a friendly takeover bid by the Japanese giant Softbank.

On the other markets, the euro is stable against the dollar at 1.0839 dollars. Oil prices are gaining ground. The August contract on North Sea Brent crude rose 1% to 73.93 dollars a barrel, while the July contract on New York-listed WTI also advanced 1% to 68.94 dollars a barrel.