Inflation and doubts about the Fed’s monetary policy scare Wall Street

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New York, Oct 1 (EFE) .- Despite a Friday of solid gains, Wall Street has registered a week of accumulated losses after four consecutive sessions of instability caused by fears that the Federal Reserve will begin to withdraw its economic stimulus measures , to which is added the high inflation and the rise in the yields of the public debt.

The Dow Jones of Industriales has lost 1.36% in the last five days, the selective S&P 500 2.21%, in its worst week since last February, and the Nasdaq a bulging 3.20%, after lose more than 400 points on Tuesday and continue their descent until Thursday.

Red has also predominated in the European stock markets: Madrid has fallen by 0.80%, London by 0.35%, Paris by 1.82%, Milan by 1.36%, Frankfurt by 2.42% and the Euro Stoxx 50 2.96%.

The declarations of the president of the Federal Reserve, Jerome Powell, was one of the most destabilizing elements of a week that already started weak on Monday, and that on Tuesday suffered a severe blow with the words of the boss of the US central bank.

Powell admitted to the US Senate Banking Committee that inflation in the country is more worrying and structural than at the beginning of this year, and pointed out that the supply problems and supply stagnation that has occurred in recent months, one of the main reasons for the price increase, could intensify.

“Inflation is high and will probably remain so in the coming months before moderating,” Powell warned Congressmen, despite saying in recent months that the price hike would be only a “transitory” period.

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On the other hand, he explained that the US central bank could begin to reduce its 120,000 million dollars in monthly bond purchases from its next monetary policy meeting, scheduled for November 2 and 3.

“A combination of slower growth, less adaptable monetary policies, weakening fiscal stimulus and persistent supply problems have all combined to dampen investor sentiment as we head into the fourth quarter of 2021,” he said in a note a managing director of Goldman Sachs, Chris Hussey.

On Friday, when Wall Street opened the month of October and began the last quarter of the year, the New York stock market registered solid advances in its three main indicators, helped by an announcement by the pharmaceutical company MSD (known as Merck in the US), who said that his oral treatment against covid-19 reduces by about 50% the risk of hospitalization or death among patients with this disease.

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