The dollar index and shorter-dated U.S. Treasury yields rose on Thursday after Federal Reserve Chairman Jerome Powell said the central bank was ” strongly committed” to controlling inflation.
* Euro zone government bond yields, meanwhile, jumped after the European Central Bank raised interest rates by a record 75 basis points. The ECB also signaled further hikes to fight inflation, even as the bloc’s economy heads into a likely recession this winter.
* Euro zone government bond yields rose on the news. The two-year German bond yield hit its highest level since June, at 1.305%.
* At a Cato Institute conference, Powell also said that inflation can be brought under control without the “soaring social costs” that it previously entailed.
* Federal Reserve officials enter a period of silence ahead of their September 20-21 meeting, at which they are expected to raise the federal funds rate by another 75 basis points, raising it to between 3, 0% and 3.25%.
* The benchmark 10-year US bond yield was trading at 3.264%. It has risen from a four-month low hit on August 2 to 2.516%, but remains below an 11-year high of 3.498% hit on June 14. The two-year yield was trading at 3.493%, down from 3.551% hit last Thursday, which was the highest since November 2007.
* Global stocks rose and the S&P 500 index traded higher after initially falling following Powell’s comments.
* On Wall Street, the Dow Jones Industrial Average was up 108.77 points, or 0.34%, at 31,690.05; the S&P 500 gained 16.13 points, or 0.41%, to 3,996 points; and the Nasdaq Composite added 51.99 points, or 0.44%, to 11,843.89 units.
* The pan-European STOXX 600 index closed 0.5% higher and the MSCI gauge of global stock markets gained 0.57%.
* The dollar index was up 0.228% and the euro was down 0.38% at $0.9961.
* The Japanese yen weakened 0.20% to 143.99 per dollar. Sterling fell 0.28% to $1.1493 after hitting its lowest level against the dollar since 1985 on Wednesday.
* US crude rose 1.61% to $83.26 a barrel, and crude gained 0.9% to $88.79.