The Federal Reserve decided to raise its key interest rate by half a percentage point, which was in line with most analysts’ expectations. Markets were relieved that the tightening of the US Federal Reserve’s monetary policy was not more pronounced, but optimism did not last long.
Sale of shares on Wall Street
While on Wednesday, immediately after the announcement of the Fed’s monetary policy decision, Wall Street shares went up sharply, Thursday was already marked by profit-taking. However, the sale of shares on the New York Stock Exchange continued on Friday. Major stock indices Dow Jones, S&P 500 and technology Nasdaq ended the trading week down 0.3 to 1.4 percent
Inflation and the war increase volatility
We can see an increase in volatility in the stock markets, at least from the beginning of this year. It is therefore no exception that the shares will strengthen significantly in one day to surrender most of the profits from the previous trading the next day. Volatility is related to the uncertainty that has increased significantly in the markets since the beginning of the year. First due to rising inflation, later due to the outbreak of war in Ukraine. Thus, stock fluctuations are likely to persist in the markets at least until the end of the Russian aggression in Ukraine.