The Federal Reserve raises interest rates by 75 basis points for the second time,
with reference to a hike in September.

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The Fed raises interest rates

Market reaction to the Fed’s decision to raise interest rates

European Consumer Confidence Index declines amid the turmoil in European economies.

Toyota production fell 10% in the first fiscal quarter as car sales expected to rise again.

The Fed raises interest rates

During the Federal Reserve’s meeting on Wednesday,
it decided to raise interest rates by 75 basis points,
and this decision is considered unanimous,
as raising interest rates came to a range between 2.25% and 2.50%,
and expectations were indicating the same numbers,
this raise is the second in two months Successively after the interest rate increase last June,
and thus the Federal Reserve raised interest rates by 150 basis points within a short period,
which represents the largest pace of interest rate increases since the eighties,
and the increases came within the framework of controlling the accelerating inflation

The most important thing that came in the statements of “Jerome Powell” during the press conference:

The Chairman of the Federal Reserve indicated not to be biased behind the expectations
that the American economy is currently experiencing a state of recession,
and that he is striving to raise interest rates in order to control the rising inflation.
Very good results are recorded, in addition to the availability of significantly more job opportunities,
which contradicts any economy going through a recession,
and therefore the labor market is currently very good in the United States and accommodates many

He also commented on the Russian invasion of Ukraine and
that it caused many economic crises for the major countries,
especially the European countries, which were greatly affected,
specifically with regard to the Russian oil crisis and the shortage of natural gas,
which directly causes pressure on inflation levels

Jerome Powell focused on confronting inflation in all possible ways
and trying to return inflation to the set target,
specifically during the coming months,
and he will try to find indicators that indicate a decline in high inflation,
and added that he is fully aware of what inflation causes suffering to the American citizen.

The Federal Reserve Committee believes that it is seeking to achieve the target for inflation at 2%,
and believes that the decision to raise interest rates in the next meeting is good to achieve the goal,
while monitoring the economic data that is issued.

artıcal name The Federal Reserve raises interest rates by 75 basis points

Market reaction to the Fed’s decision to raise interest rates

The US dollar is falling

During trading yesterday, Wednesday, the dollar index,
which measures the strength of the currency against a basket of foreign currencies,
recorded a drop to 107 points after the interest decision issued by the US Federal Reserve.
The dollar index is currently trading at 106.45

gold is rising

Gold prices jumped after the US Federal Reserve’s decision,
recording an increase of 1%, and this came with the decline in the dollar and US bond yields,
and silver recorded a rise of 2.6% at $19.09 an ounce.

US indices rise

American stock indices recorded a rise, specifically the Nasdaq index after the Fed,
and therefore the American indices recorded
the largest gains within one day in percentage terms since April 2020,
and the Standard & Poor’s 500 index rose by 2.58% at 102.26 points,
and the Nasdaq recorded an increase at 12,027 points At a rate of 4%,
while the Dow Jones Industrial Average rose at 32,196 points, at a rate of 1.3%.

artıcal name The Federal Reserve raises interest rates by 75 basis points

European Consumer Confidence Index declines amid the turmoil in European economies.

The European Consumer Confidence Index witnessed a sharp decline in the data released this morning,
Thursday, and these disappointing results for the economy came amid the situation in European countries
and the sanctions imposed on Russia for its invasion of Ukraine,
which affected energy products as well as basic commodities,
because Europe is almost mainly dependent on Russia for its imports. of these products.

The consumer confidence index in the euro area declined from
–23.8 in the previous month of June to -27.0,
and the consumer confidence index is of great importance to assess the economic situation,
as it measures the mood of consumers and the rise in numbers indicates a rise in the extent of optimism among consumers,
which increases the rates of purchase of goods and services,
which reflects positively on the wheel of the economy that is active,
and the opposite happens when the rate of consumer optimism decreases.

energy crisis

It is noteworthy that the crisis experienced by the European consumer came simultaneously
with the energy crisis, after the Russian side decided to reduce gas supplies to Europe,
and the reduction rate reached 40% of the pipeline capacity,
and Russia justifies this by waiting for the return of the Siemens turbine from Canada after the completion of maintenance work.
In addition to Russian President Vladimir Putin’s assertion that the lack of gas exports to Europe
came in response to the sanctions imposed by European countries on Russia for its war on Ukraine.
He added that the gas supply in the normal situation needs six Siemens turbines,
one of these turbines is a backup, but now we find only two units in the framework of work
He also commented on the closure of the Nord Stream 2 pipeline,
despite its readiness to operate at full capacity and to compensate for the current shortfall in flows,
but Putin said it explicitly that the current closure is very simple for political reasons.

artıcal name The Federal Reserve raises interest rates by 75 basis points

The decline of the economies of the eurozone countries.

Today, a set of economic indicators were released
that warn that the European economy will reach the bottom.
The economic sentiment index, which was released on Thursday,
came to a decline to 10.7 in service sentiment after it was expected to reach 13.5,
and a decline to 3.5 in industrial sentiment after expectations were to record 6.0
Senior economists still believe that the economic situation,
including inflation and the crises it is going through,
will continue to put pressure on the economy and increase continuously in the absence of a change
in the current situation in the coming months,
in addition to supply chain disruptions
and closures in China as a result of the Russian wars on Ukraine

Italian consumer confidence index falls to its lowest level since May 2020
In the context of talking about the economic situation in the euro countries,
we find that Italy is one of the countries that suffer the most due to economic problems,
as the impact of consumer confidence fell to 94.8 points after it was at 98.3 points in the previous month of June,
with a decline in consumer economic sentiment from 93.9 points In June,
it reached 84.9 points, and thus the consumer confidence index fell to its lowest level from May of the year 2020

European stocks

Despite the economic situation in Europe,
and the US Central Bank raised interest rates previously to 75 basis points,
which is the second time in a row in order to confront inflation,
economists expected a contraction in the euro area at a rate of 0.1% during the third quarter of this year
and an increase of up to 0.2% during The fourth quarter,
eventually reaching a normal growth rate next year
European shares witnessed a rise, and the “Stoxx Europe 600” index rose to 430 points,
at a rate of 0.54%, while the British “Fuchi” index rose by 0.27% at 7,368 points,
and the German “DAX” index also rose at 13,202 points,
and the French “CAC” index rose 0.70% at 6,301 points

artıcal name The Federal Reserve raises interest rates by 75 basis points

Toyota production fell 10% in the first fiscal quarter as car sales expected to rise again.

During the first quarter of this fiscal year,
Toyota Auto Industries ended a decline in its production by about 10%,
which is a target lower than the company’s expectations.
The declines in production in Thailand during the month of June came as a result
of the shortage of supplies due to the supply chain crisis,
especially in the automotive and electronics sectors,
but the company is optimistic about its business starting in August this year.

Recovery in production and sales

The company, which represents one of the largest automakers in the world,
sees positive signs of increasing production and sales,
and that it will reach its goal of achieving a record global
production of 9.7 million cars by the end of March 2023.
The company produced 2.120 million cars in three months specifically from April to June,
down from the target of 9.8%, which was at 2.350 million cars, but in June alone,
production rates increased to 793.378 thousand cars,
which is higher than expected during this month at 750 rolls of cars.

Statements on behalf of the company come that it expects recovery,
including Japan as well, but we must know very well that the future is unclear
and cannot be expected under the current economic conditions.

Production in Europe is increasing

In light of the problem of electronic chips suffered by major factories
and companies globally, which has not yet been resolved,
but the situation in Europe contributed to increasing production due to the lack of use of chips for vehicle components,
thus increasing production at a rate of 12.4% in June on an annual basis.

The company’s factories in Asia

As a result of the shortage of semiconductors
that contribute to the advanced automotive industry for its reliance on more chips,
this led to great damage to Toyota factories in Japan and North America
and in China production increased by 42% in June,
as a result of the easing of the closure in Shanghai,
and production in other countries in Asia decreased as a result of the spread of epidemic.

Positive expectations

The company’s officials stated that their permanent goal is to maintain the quality
and safety that characterizes the company,
and that in the current period it is trying to calm down and
alleviate the burdens borne by the company on its suppliers,
as a result of the change in production plans,
and that it is already on the right track and
that the pressures happening on the company are the pressures of the global economic situation.

artıcal name The Federal Reserve raises interest rates by 75 basis points

The Federal Reserve raises interest rates by 75 basis points

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