LONDON: The UK’s benchmark FTSE 100 edged higher on Friday as markets globally cheered US Federal Reserve Chair Jerome Powell’s nod to initiate rate cuts at the Jackson Hole economic symposium.
The blue-chip FTSE 100 index was up 0.5%, but logged in weekly declines. The mid-cap FTSE 250 added 0.4%, touching highest levels in two weeks and marked its second week of gains.
In a highly anticipated speech at Jackson Hole, Wyoming, Powell said “the time has come” for the US central bank to cut interest rates as rising risks to the job market left no room for further weakness and inflation was in reach of the Fed’s 2% target, offering an explicit endorsement of an imminent policy easing.
“Powell was clear about the first rate cut, but not so much about the next ones. I think slow and steady is how the Fed wants to pace this early part of the easing,” said Sam Stovall, Chief Investment Strategist, CFRA Research.
Traders now anticipate 100% chance of a September rate cut in the US, with one-in-three pricing in a half-point cut.
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