Bonds & Stocks
Stocks slumped with US equity futures as policy tightening fears from the US to Norway to the UK hobbled the market's bull run. Contracts for the S&P 500 and Nasdaq 100 pointed lower following a selloff on Wall Street on hawkish warnings by Federal Reserve Chair Jerome Powell in testimony to Congress. The latest jobs data Thursday gave no cause to doubt Powell's assessment, with weekly initial jobless claims unchanged versus the previous period.
Economy
Jerome Powell would like to make one thing clear: the Federal Reserve is not done hiking interest rates. He asserted there was no inconsistency between officials holding rates steady last week while forecasting further increases later in the year.
Republican lawmakers voiced concern that Fed plans to tighten regulation in the wake of those failures would hurt the economy and needlessly hamstring banks, particularly smaller ones.
Powell suggested that community banks would be spared any new rules and stressed that any increases in bank capital the Fed does go ahead with won't take effect for a long while. A proposal from the Fed is expected this summer.
World
The Bank of England unexpectedly raised its benchmark interest rate by a half percentage point, stepping up its fight against the worst bout of inflation since the 1980s and warning it may have to hike again. The nine-member Monetary Policy Committee voted 7-2 for an increase to 5%, the highest level in 15 years and the biggest move since February. Markets had priced in only a 40% chance of a half-point hike, with most economists anticipating a quarter point.