The latest from London: Fed minutes dampen sentiment

Trailing a weak session on Wall Street and in Asia, the FTSE 100 is down 0.7% this morning. Markets have a hard time digesting yesterday’s minutes from the US Federal Reserve, which signaled that it could raise interest rates sooner than expected and reduce overall asset holdings to combat inflation.

The session of January 5, 2022 was a difficult one for American markets, with the Nasdaq 100 losing more than 3%. The Fed minutes show that the central bank is more nervous than expected about inflation. This is all the more embarrassing since they had spent a good part of 2021 underestimating the impact of inflation. In reaction to yesterday's news, more economists are now anticipating the announcement of a quarter-point rate hike at the meeting scheduled for March 16 and 17 (this will be the second FOMC meeting of the year, the first being scheduled for January 26 and 27).

Among stocks, Next raised its outlook for the financial year ending in January, and said its profits will continue to rise in fiscal 2023.

Meanwhile, Made.com said that sales jumped 38% year-on-year in 2021 thanks to an increase in active customers.

 

Things to read today:

Record $14bn flowed into crime-linked crypto wallets in 2021 (Financial Times)

Treasury Rout Goes Global as Fed Opens Door to Faster Tightening (Bloomberg)