Investors got a bit of a reality check from the Federal Reserve again
The headline news was much as expected with the scale of the rate hike dialled back to 25 basis points. However, Fed chair Jerome Powell poured cold water on any potential pivot in the near term as he pointed to at least a couple more increases to come and no reduction in rates until 2024.
AJ Bell investment director Russ Mould said: “Yet for the time being the market seems minded to concentrate on the positives, with Powell noting the ‘disinflationary process has started’.
“The FTSE 100 moved higher ahead of the Bank of England’s own decision on rates – arguably the policymakers in Threadneedle Street have less margin for error than their counterparts in Washington given the UK has a weaker economy and higher inflation.
“The gains enjoyed by index heavyweight Shell helped, supporting the FTSE 100 as it posted record profits.”