1) Powell will not hold back on rate hike to bring inflation down
The Federal Reserve chair Jerome Powell said that he will not hold back the attempt to increase interest rate until the inflation falls back toward a healthy level.
“If that involves moving past broadly understood levels of neutral we won’t hesitate to do that,” he said in an interview with The Wall Street Journal.
The statement was not a surprise and the market is now certain that there will be a 50bps rate hike coming in June and July.
2) Japan’s 1Q22 GDP falls 1%, but still better than expected
Japan’s economy dropped 1% in the first quarter of 2022 compared to the same period last year, while dipping by 0.2% compared to the previous quarter, according to the government data shown early Wednesday. The annualized drop was less than the 1.8% contraction estimated by Reuters poll.
3) Oil prices fall amid potential additional supply from Venezuela
Oil prices fell 2% on Tuesday on the report that the United States of America could ease some restrictions on Venezuela, raising hopes for additional supply in the market. Meanwhile, Jerome Powell also warned that the U.S. economy could hurt as the central bank will not hold back on the attempt to bring down inflation.
On Tuesday, the international benchmark Brent crude fell 2% to close at $111.93 per barrel. Meanwhile, the U.S. West Texas Intermediate fell 1.6% to close at $112.40 per barrel.
