Market Recap: Fed's Jefferson signals extended high rates for stubborn inflation. NY Fed's 1-yr inflation expectation up to 3.26%, boosting USD, press


Yesterday's market review:

Overnight, there were limited significant data releases, with only the New York Fed's one-year inflation expectations and remarks from the Vice Chair of the Federal Reserve, Mr. Jefferson. During his speech, Mr. Jefferson underscored the stubbornness of inflation, advocating for the Federal Reserve to maintain elevated interest rates for a longer duration.

He acknowledged the recent divergence in speeches among Fed officials, causing market fluctuations, yet emphasized that this does not represent a unified stance within the Fed. Mr. Jefferson's remarks suggest an inclination within the Fed towards a primary stance of stability and cautious observation, cautioning against premature interpretations of the Fed's policy stance.

Following the conclusion of the speech, the New York Fed released the one-year inflation expectations, which surged from the previous 3.00% to 3.26%. Subsequently, the dollar rebounded while non-dollar currencies faced pressure, leading to a $10 drop in gold prices within a span of five minutes.

The U.S. stock market has been maintaining high levels of volatility recently, with no significant reversal trend observed before the release of CPI data. Influenced by the resurgence in the Chinese stock market, Chinese concept stocks notably led the upward trend. Moreover, the reappearance of key members from the WallStreetBets community, who were instrumental in the GameStop surge earlier this year, caused a surge in overnight trading of WSB concept stocks, resulting in multiple trading halts for GameStop and a doubling of its stock price overnight.